SAT, 17 SEPT, 2022-theGBJournal| Fitch Ratings has upgraded FBN Holdings Plc’s (FBNH) and First Bank of Nigeria Ltd’s (FBN) Long-Term Issuer Default Ratings (IDRs) to ‘B’ from ‘B-‘. The Outlooks are Stable. Fitch has also upgraded their Viability Ratings (VR) to ‘b’ from ‘b-‘.
The upgrade of the Long-Term IDRs follows that of the VRs, reflecting that corporate governance irregularities publicly raised by the Central Bank of Nigeria (CBN) in April 2021, including two longstanding related-party exposures, have largely been addressed and therefore risks to capitalisation have receded, helped by strong internal capital generation since the irregularities were raised.
Fitch has withdrawn FBNH’s and FBN’s Support Ratings and Support Rating Floors as they are no longer relevant to the agency’s coverage following the publication of its updated Bank Rating Criteria on 12 November 2021.
‘’In line with the updated criteria, we have assigned Government Support Ratings (GSR) of ‘no support’ (ns) to both issuers,’’ Fitch said.
FBN is the third-largest bank in Nigeria, representing 11% of domestic banking-system assets at end-2021. A strong franchise supports a stable funding profile and a low cost of funding. Revenue diversification is strong, with non-interest income representing 48% of operating income in 2021.
Earlier on Thursday, the global rating agency affirmed Union Bank of Nigeria PLC’s (Union) Long-Term Issuer Default Rating (IDR) at ‘B-‘ with a Stable Outlook.
Fitch also withdrew Union’s Support Rating of ‘5’ and Support Rating Floor of ‘No Floor’ as they are no longer relevant to the agency’s coverage following the publication of its updated Bank Rating Criteria on 12 November 2021.
In line with the updated criteria, Fitch have assigned Union a Government Support Rating (GSR) of ‘No Support’ (ns).
Fitch noted that Union’s recent shareholder change has no immediate impact on the VR, although, over time, it will be beneficial to its business profile and revenue-generation capacity.
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