Fitch Revises Bank of Industry's Outlook to Negative; Affirms IDR at 'B+'

Proshare

Tuesday, February 21, 2017 9:20 AM / Fitch Ratings

Fitch Ratings has revised Nigeria-based Bank of Industry Limited's (BOI) Outlook to Negative from Stable, while affirming the Long-Term Issuer Default Rating (IDR) at 'B+'. This follows the recent revision of Nigeria's Outlook to Negative. A full list of rating actions is available at the end of this rating action commentary.

Key Rating Drivers 

IDRS, Support Rating, Support Rating Floor And National Ratings

BOI is a state-owned development bank and its IDRs are driven by its Support Rating Floor (SRF) of 'B+', which reflects a limited probability of sovereign support. The SRF factors in BOI's 99.9% state ownership, policy role and strategic importance to Nigeria's economic and industrial development. 
 
It also reflects the authorities' stronger ability to support BOI than for commercial banks, as BOI's operations are almost entirely in local currency. BOI's funding is long-term and almost exclusively sourced from the Central Bank of Nigeria (CBN). BOI's Negative Outlook mirrors that on the sovereign rating.

BOI's National Ratings reflect the bank's creditworthiness relative to the best credits in Nigeria.
 
Fitch does not assign a Viability Rating to BOI as its business model is entirely dependent on the support of the state.
 
Rating Sensitivities

IDRS, Support Rating, Support Rating Floor and National Ratings

BOI's IDRs, SR and SRF are sensitive to a weakening in the ability of Nigeria to support the bank, which would be indicated by a downgrade of Nigeria's sovereign rating. The ratings could also be downgraded if Fitch's view of the state's willingness to support the bank changes adversely, for example in the event of a material change in the government ownership or a change in the bank's policy role. 
 
BOI's National Ratings are sensitive to a change in Fitch's opinion of BOI's creditworthiness relative to the best credits in Nigeria. 
 
The rating actions are as follows: 
 
Bank of Industry
Long-Term IDR affirmed at 'B+', Outlook revised to Negative from Stable 

Short-Term IDR affirmed at 'B'

National Long-Term Rating affirmed at 'AA+(nga)'

National Short-Term Rating affirmed at 'F1+(nga)'

Support Rating affirmed at '4'

Support Rating Floor affirmed at 'B+'

Related News
1.       Fitch Revises 4 Nigerian Banks' Outlook to Negative; Affirms 10 IDRs
2.      Fitch Revises Nigeria's Outlook to Negative; Affirms at 'B+'
3.      Weak Nigerian Economy Will Endanger Fiscal Consolidation - Fitch
4.      Fitch Revises Down Support Rating Floors of 10 Nigerian Banks
5.      Federal Republic of Nigeria Ratings Lowered To 'B/B' On Weak Growth Dynamics; Outlook Stable
6.      Fitch Downgrades Nigeria's Bank of Industry to 'B+'; Outlook Stable
7.      Fitch Rating Actions on Nigerian Banks on Sovereign Downgrade
8.     Nigeria Banks Absorb Effective Devaluation
9.      Fitch Downgrades Nigeria to 'B+'; Outlook Stable
10.  Moody's credit rating; A downgrade that is strongly argued
11.   Another ratio to underpin the credit ratings 
12.  Credit ratings: how Fitch, Moody's and S&P rate each country
13.  IOSCO Issues Final Code of Conduct Fundamentals for Credit Rating Agencies
14.  Fitch rating affirms Nigeria's sovereign rating at negative ...
15.   S&P cuts Nigeria rating to B+ from BB-, cites ... – Mar 23, 2015
16.  Nigeria: S&P Ratings downgrade behind the ... – Mar 23, 2015
17.   A split sovereign rating, again – Mar 27, 2015
18.  Fitch revises Nigeria's credit outlook to "Negative" from “Stable”
19.  IMF urges credit rating agencies to provide greater clarity  

Related News
SCROLL TO TOP