Fitch affirms First Bank, BoI, six others’ ratings on Sovereign Criteria Change

Fitch Ratings has today 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).

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

It said that this 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”.

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. Fitch believes that SBG’s support would extend equally to both the bank and the holding company. The agency explained.

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.

“National Ratings are sensitive to a weakening ability of the Nigerian sovereign to provide support. UBA’s National Ratings are sensitive to both a weakening in sovereign support as well as any change in its standalone creditworthiness.

“The National Ratings of SIBTC and SIBTCH are sensitive to a change in potential support (relating to both ability and propensity) from their ultimate parent, SBG. The National Ratings of SIBTCH and SIBTC could withstand a three-notch downgrade of SBG’s Long-Term IDR.

The rating actions are as follows: Bank of Industry Limited Long-Term IDR: unaffected at ‘B+’; Outlook Stable Short-Term IDR: unaffected at ‘B’ National Long-Term rating affirmed at ‘AA+(nga)’ National Short-Term ratings affirmed at ‘F1+(nga)’ Support Rating: unaffected at ‘4’ Support Rating Floor: unaffected at ‘B+’.

First Bank of Nigeria Ltd Long-Term IDR: unaffected at ‘B’ ; Outlook Stable Short-Term IDR: unaffected at ‘B’ National Long-Term Rating: affirmed at ‘A+(nga)’ National Short-Term Rating: affirmed at ‘F1(nga)’ Viability Rating: unaffected at ‘b’ Support Rating: unaffected at ‘4’ Support Rating Floor: unaffected at ‘B’ FBN Finance Company BV’s subordinated notes: unaffected at ‘B-‘; Recovery Rating of ‘RR5’.

United Bank for Africa Plc Long-Term IDR: unaffected at ‘B’; Outlook Stable Short-Term IDR: unaffected at ‘B’ National Long-Term Rating: affirmed at ‘A+(nga)’ National Short-Term Rating: affirmed at ‘F1(nga)’ Viability Rating: unaffected at ‘b’ Support Rating: unaffected at ‘4’ Support Rating Floor: unaffected at ‘B’.

Diamond Bank Plc Long-Term IDR: unaffected at ‘B’; Stable Outlook Short-Term IDR: unaffected at ‘B’ National Long-Term Rating: affirmed at ‘BBB+(nga)’ National Short-Term Rating: affirmed at ‘F2(nga)’ Viability Rating: unaffected at ‘b-‘ Support Rating: unaffected at ‘4’ Support Rating Floor: unaffected at ‘B’ Senior unsecured notes: unaffected at ‘B’/’RR4’.

Union Bank of Nigeria Plc Long-Term IDR: unaffected at ‘B’; Stable Outlook Short-Term IDR: unaffected at ‘B’ National Long-Term Rating: affirmed at ‘BBB+(nga)’ National Short-Term Rating: affirmed at ‘F2(nga)’ Viability Rating: unaffected at ‘b-‘ Support Rating: unaffected at ‘4’ Support Rating Floor: unaffected at ‘B’.

Fidelity Bank Plc Long-Term IDR: unaffected at ‘B’; Stable Outlook Short-Term IDR: unaffected at ‘B’ National Long-Term Rating: affirmed at ‘BBB+(nga)’ National Short-Term Rating: affirmed at ‘F2(nga)’ Viability Rating: unaffected at ‘b-‘ Support Rating: unaffected at ‘4’ Support Rating Floor: unaffected at ‘B’ Senior unsecured notes: unaffected at ‘B’/’RR4’.

First City Monument Bank Ltd. Long-Term IDR: unaffected at ‘B’; Stable Outlook Short-Term IDR: unaffected at ‘B’ National Long-Term Rating: affirmed at ‘BBB+(nga)’ National Short-Term Rating: affirmed at ‘F2(nga)’ Viability Rating: unaffected at ‘b-‘ Support Rating: unaffected at ‘4’ Support Rating Floor: unaffected at ‘B’.

Stanbic IBTC Bank Plc National Long-Term Rating: affirmed at ‘AAA(nga)’ National Short-Term Rating: affirmed at ‘F1+(nga)’ Stanbic IBTC Holdings Plc National Long-Term Rating: affirmed at ‘AAA(nga)’ National Short-Term Rating: affirmed at ‘F1+(nga)’