Fitch Affirms Eight Nigerian Banks Ratings On Criteria Change

Fitch Ratings has affirmed the National Ratings of First Bank of Nigeria (FBN), United Bank for Africa (UBA), Fidelity Bank (Fidelity), Diamond Bank (Diamond), First City Monument Bank (FCMB), Union Bank (Union) and Stanbic IBTC Bank (SIBTC) and Bank of Industry (BOI) as well as the bank holding company, Stanbic IBTC Holdings (SIBTCH).

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The London-based ratings agency, said the rating actions followed its downgrade of Nigeria’s Long-Term Local Currency Issuer Default Rating (IDR) to ‘B+’ from ‘BB-‘, as a result of which it was now equalised with the Long-Term Foreign Currency IDR.

It said the action was driven by the change in Fitch’s sovereign rating criteria. Following the sovereign criteria change and rating action, Fitch has thereby recalibrated the national rating scale for Nigeria.

“As a result, the national ratings for these banks are affirmed as there is no change in their relative creditworthiness,” it added.

The national rating of UBA is said to be based on its standalone creditworthiness and is also underpinned by potential sovereign support while the national ratings of FBN, Fidelity, Diamond, FCMB and UBN are based on potential sovereign support given their systemic importance.

The national ratings of SIBTC and SIBTCH are based on the probability of support from their parent, Standard Bank Group Limited (SBG; BBB-/Stable). SBG has a majority 53.2 per cent stake in SIBTCH, which in turn owns 100 per cent of SIBTC.

The national ratings of BOI are said to be driven by potential sovereign support reflecting its 99.9 per cent state ownership; its policy role and the bank’s strategic importance to Nigeria’s economic and industrial development.