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Monday, November 13,
2017 5:39PM / Moody’s Investors Service
Moody's Investors Service (Moody's) has today downgraded to B2 from B1
the long-term local currency deposit and issuer ratings of four Nigerian banks
-- Access Bank Plc (Access), Guaranty Trust Bank Plc (GTBank), United Bank for
Africa Plc (UBA) and Zenith Bank Plc (Zenith) and the long-term local and
foreign currency issuer ratings of Bank of Industry, a Nigerian development
bank. Moody's also downgraded to B3 from B2 the long-term foreign currency
deposit ratings of Access, GTBank, UBA and Zenith, as well as those of Union
Bank of Nigeria plc (Union), First Bank of Nigeria Limited (FBN) and Sterling
Bank Plc (Sterling). Concurrently, Moody's downgraded the baseline credit
assessments (BCAs) of Zenith and GTBank to b2 from b1.
A full list of affected ratings is provided towards the end of this
press release.
Ratings Rationale
Impact of Government Support On Banks'
Local Currency Deposit Ratings
The primary driver of today's rating action is the weaker capacity of
the government to provide support to banks, in case of stress, as reflected in
the downgrade of the sovereign issuer rating to B2 from B1. Subsequently,
Access' and UBA's long-term local currency deposit ratings and Bank of
Industry's long-term issuer ratings no longer benefit from a one-notch uplift
from their b2 BCAs (or standalone credit profile, as is the case for Bank of
Industry) as these are now at the same level as the government bond rating. The
long-term local currency deposit ratings of Sterling, Union and FBN have been
affirmed at B2, as their b3 BCAs continue benefiting from one notch of
government support uplift.
Weaker Credit Profile of The Nigerian Government Exerts Pressure on
Banks
The secondary driver of today's rating
action is the Nigerian banks' significant holdings of government securities,
which generally exceed 100% of their core capital, linking their credit profile
to that of the government. In view of the correlation between sovereign and
bank credit risk, the banks' standalone credit profiles and ratings are
constrained by the rating of the government. As a result, the BCAs for Zenith
and GTBank have been downgraded to b2 from b1, in line with the downgrade of
the government issuer rating, despite the resilient financial performance
witnessed by both banks over the last 24 months. The BCAs of the other rated
Nigerian banks have been affirmed as they already capture risks emanating from
their sovereign exposures.
Individual Banks' Main Rating Drivers
Union Bank of Nigeria Plc
Moody's has today affirmed Union Bank's
BCA and adjusted BCA at b3, long-term local currency deposit rating at B2,
local and foreign currency issuer ratings at B2 and global scale short-term
deposit and issuer ratings at Not-Prime. Concurrently, Moody's has downgraded
Union's long term foreign currency deposit rating to B3 from B2, the long-term
Counterparty Risk Assessment (CR Assessment) to B2(cr) from B1(cr), long term
local currency national scale deposit ratings to A2.ng from Aa3.ng and foreign
currency national scale deposit ratings to A3.ng/NG-2 from A1.ng/NG-1. The
outlook on all long-term deposit and issuer ratings remains stable.
The affirmations reflect (1) Moody's expectation of robust levels of tangible
common equity over the next 12 to 18 months, following recent completion of a
rights issue and (2) a stable deposit-based funding structure and moderate
local currency liquidity buffers. These strengths are balanced against (3)
elevated credit risks on the back of single-name and sector concentration risks
and (4) relatively modest profitability levels versus larger local peers. The
local currency deposit and issuer ratings also continue to incorporate one
notch uplift from the bank's b3 BCA based on our assessment of a high
probability of government support in case of need.
The decision to downgrade the long term foreign currency deposit rating
to B3 and the foreign currency national scale ratings to A3.ng/NG-2, follows
the downgrade of the relevant country ceiling, which captures foreign currency
and convertibility risks. Similarly, the downgrade of the bank's long-term CR
Assessment reflects the government's reduced capacity to provide support in
case of need. As a result, the CR Assessment, which is positioned one notch
above the adjusted BCA of b3, reflecting Moody's view that its probability of
default is lower than that of deposits, no longer benefits from government
support uplift. The downgrade of the local currency deposit national scale rating
(NSR) is a result of the repositioning of our relative ranking of Nigerian
banks within our NSR map following the downgrade of the corresponding local
currency deposit global scale rating.
First Bank of Nigeria Limited
Moody's has today affirmed FBN's BCA and
adjusted BCA at b3, long-term local currency deposit rating at B2, local and foreign currency issuer ratings at B2, short-term global scale deposit and issuer ratings at Not-Prime, and local currency national scale ratings at A2.ng/NG-1.
Concurrently, Moody's has downgraded the bank's long term foreign currency
deposit rating to B3 from B2, foreign currency national scale ratings to A3.ng/NG-2 from A2.ng/NG-1, and
long-term CR Assessment to B2(cr) from B1(cr). The outlook on the deposit and
issuer ratings remains negative.
The affirmations reflect (1) FBN's still weak asset risk metrics, with
non-performing loans (NPLs) estimated at over 20% of gross loans as of June
2017, albeit on a declining trend, (2) still tight - although improving -
foreign currency liquidity, counterbalanced by (3) the bank's resilient
pre-provision profitability -- with FBN's pre-provision profits at 3.9% of
average total assets -- and an equity-to-assets ratio of 11.7% as of June 2017
and (4) a stable deposit-based funding structure and strong local currency
liquidity buffers. The local currency deposit and issuer ratings also continue
to incorporate one notch uplift from the bank's b3 BCA based on our assessment
of a high probability of government support in case of need.
The decision to downgrade the long term
foreign currency deposit rating to B3 and the foreign currency national scale ratings to A3.ng/NG-2follows
the downgrade of the relevant country ceiling, which captures foreign currency
and convertibility risks. Similarly, the downgrade of the bank's long-term CR
Assessment reflects the government's weakened capacity to provide support in
case of need. As a result, the CR Assessment, which is positioned one notch
above the adjusted BCA of b3, reflecting Moody's view that its probability of
default is lower than that of deposits, no longer benefits from an additional
notch of government support uplift.
Access Bank Plc
Moody's has today affirmed the BCA and
adjusted BCA of Access at b2, long-term CR Assessment at B1(cr) and global
scale short-term deposit and issuer ratings at Not-Prime. Concurrently, Moody's
has downgraded Access' long-term local currency deposit rating to B2 from B1,
long term foreign currency deposit rating to B3 from B2, long-term local and
foreign currency issuer ratings to B2 from B1, long term local currency
national scale deposit ratings to A1.ng from Aa2.ng and foreign currency
national scale deposit ratings to A3.ng/NG-2 from Aa3.ng/NG-1. The outlook on
all long-term deposit and issuer ratings remains stable.
The affirmation of the bank's BCA reflects its strong asset quality
metrics and robust loan underwriting standards and risk management processes,
large local currency liquidity buffers, and resilient capital buffers. These
strengths are balanced against concentration risks in the bank's loan book,
including its exposure to loans denominated in foreign currency.
The downgrades are primarily driven by the rating agency's view that the
government's capacity to provide support for Nigerian banks in times of stress
has weakened as indicated by Moody's recent downgrade of Nigeria's government
bond ratings to B2 stable from B1 stable. The decision to downgrade the long
term foreign currency deposit rating to B3 and the foreign currency national
scale ratings to A3.ng/NG-2, follows the downgrade of the relevant country
ceiling, which captures foreign currency and convertibility risks. The
downgrade of the local currency deposit NSR is a result of the repositioning of
our relative ranking of Nigerian banks within our NSR map following the
downgrade of the corresponding local currency deposit global scale rating.
Guaranty Trust Bank Plc
Moody's has today downgraded GTBank's BCA
and adjusted BCA to b2 from b1, long-term local currency deposit rating to B2
from B1, long term foreign currency deposit rating to B3 from B2, long-term
local and foreign currency issuer ratings to B2 from B1, long term local
currency national scale deposit ratings to Aa3.ng from Aa1.ng, foreign currency
national scale deposit ratings to A3.ng/NG-2 from Aa3.ng/NG-1 and long-term CR
Assessment to B1(cr) from Ba3(cr). The Aa3.ng/NG-1 local currency deposit
national scale rating (NSR) now represents the highest attainable NSR rating in
Nigeria. The global scale short-term deposit and issuer ratings were affirmed
at Not-Prime. The outlook on all long-term deposit and issuer ratings remains
stable.
The downgrades are primarily driven by the bank's high exposure to
government securities that link the bank's credit profile to that of the
government. The decision to downgrade the long term foreign currency deposit
rating to B3 and the foreign currency national scale ratings to A3.ng/NG-2,
follows the downgrade of the relevant country ceiling, which captures foreign
currency and convertibility risks. The downgrade of the local currency deposit
NSR is a result of the repositioning of our relative ranking of Nigerian banks
within our NSR map following the downgrade of the corresponding local currency
deposit global scale rating.
GTBank's ratings reflect (1) the bank's resilient earnings generation
capacity and robust capital buffers, which together provide a relatively thick
cushion to withstand asset quality deterioration compared with domestic peers,
(2) the bank's high liquidity buffers and a predominantly deposit funded
balance sheet, and (3) the bank's robust franchise, which allows it to attract
inexpensive deposits and to lend to high credit quality borrowers (relative to
other Nigerian banks), resulting in relatively strong asset quality metrics and
low credit costs.
Sterling Bank Plc
Moody's has today affirmed the BCA and
adjusted BCA of Sterling at b3, long-term local currency deposit rating at B2,
local and foreign currency issuer ratings at B2 and global scale short-term
deposit and issuer ratings at Not-Prime. Concurrently, Moody's has downgraded
the long term foreign currency deposit rating to B3 from B2, long-term CR
Assessment to B2(cr) from B1(cr), long term local currency national scale
deposit ratings to A2.ng from A1.ng and foreign currency national scale deposit
ratings to A3.ng/NG-2 from A2.ng/NG-1. The outlook on all long-term deposit and
issuer ratings remains stable.
The affirmations reflect (1) Sterling's resilient deposit funded balance
sheet and stable local currency liquidity balanced against, (2) the bank's low
foreign currency liquidity buffers, and (3) vulnerabilities in asset quality on
account of high single-name and sector concentration risks. The local currency
deposit and issuer ratings also continue to incorporate one notch uplift from
the bank's b3 BCA based on our assessment of a high probability of government
support in case of need.
The decision to downgrade the long term foreign currency deposit rating
to B3 and the foreign currency national scale ratings to A3.ng/NG-2, follows
the downgrade of the relevant country ceiling, which captures foreign currency
and convertibility risks. Similarly, the downgrade of the bank's long-term CR
Assessment reflects the government's reduced capacity to provide support in
case of need. As a result, the CR Assessment, which is positioned one notch
above the adjusted BCA of b3 reflecting Moody's view that its probability of
default is lower than that of deposits, no longer benefits from government
support uplift. The downgrade of the local currency deposit NSR is a result of
the repositioning of our relative ranking of Nigerian banks within our NSR map
following the downgrade of the corresponding local currency deposit global
scale rating.
United Bank for Africa Plc (UBA)
Moody's has today affirmed UBA's BCA and
adjusted BCA at b2, long-term CR Assessment at B1(cr) and global scale
short-term deposit and issuer ratings at Not-Prime. Concurrently, Moody's has downgraded UBA's long-term local currency
deposit rating to B2 from B1, long term foreign currency deposit rating to B3 from B2,
long-term local and foreign currency issuer ratings to B2 from B1,
long term local currency national scale deposit ratings to A1.ng from Aa2.ng and
foreign currency national scale deposit ratings to A3.ng/NG-2 from Aa3.ng/NG-1. The
outlook on all long-term deposit and issuer ratings remains stable.
The affirmations reflect (1) the bank's
resilient asset quality profile, which is more geographically diversified than
most of its peers and (2) then bank's predominantly deposit funded balance
sheet, which is supported by a solid pan-African franchise.
The downgrades are primarily driven by Moody's view that the
government's capacity to provide support for Nigerian banks in times of stress
has weakened as indicated by Moody's recent downgrade of Nigeria's government
bond ratings to B2 stable from B1 stable. The decision to downgrade the long
term foreign currency deposit rating to B3 and the foreign currency national scale ratings to A3.ng/NG-2,
follows the downgrade of the relevant country ceiling, which captures foreign
currency and convertibility risks. The downgrade of the local currency deposit
NSR is a result of the repositioning of our relative ranking of Nigerian banks
within our NSR map following the downgrade of the corresponding local currency
deposit global scale rating.
Zenith Bank Plc
Moody's has today downgraded Zenith's BCA
and adjusted BCA to b2 from b1, long-term local currency deposit rating to B2
from B1, long term foreign currency deposit rating to B3 from B2, long-term
local and foreign currency issuer ratings to B2 from B1, long term local
currency national scale deposit ratings to Aa3.ng from Aaa.ng, foreign currency
national scale deposit ratings to A3.ng/NG-2 from Aa3.ng/NG-1, long-term CR
Assessment to B1(cr) from Ba3(cr). The Aa3.ng/NG-1 local currency deposit NSR
now represents the highest attainable NSR rating in Nigeria. The global scale
short-term deposit and issuer ratings were affirmed at Not-Prime. The outlook
on all long-term deposit and issuer ratings remains stable.
The downgrades are primarily driven by the bank's high exposure to
government securities that links the bank's credit profile to that of the
government. The decision to downgrade the long term foreign currency deposit
rating to B3 and the foreign currency national scale ratings to A3.ng/NG-2,
follows the downgrade of the relevant country ceiling, which captures foreign
currency and convertibility risks. The downgrade of the local currency deposit
NSR is a result of the repositioning of our relative ranking of Nigerian banks
within our NSR map following the downgrade of the corresponding local currency
deposit global scale rating.
Zenith's ratings reflect (1) the bank's resilient earnings generating
capacity and robust capital buffers, which together provide a cushion to
withstand asset quality deterioration, (2) the bank's high liquidity buffers
and a predominantly deposit funded balance sheet, and (3) the bank's robust
franchise, which allows it to attract inexpensive deposits and to lend to high
credit quality borrowers (relative to other Nigerian banks), resulting in
relatively strong asset quality metrics and low credit costs.
Bank of Industry
Moody's has today downgraded Bank of
Industry's long-term local and foreign currency issuer ratings to B2 from B1
and its long term local and foreign currency national scale issuer ratings to
Aa3.ng from Aa1.ng. The Aa3.ng/NG-1 national scale issuer rating now represents
the highest attainable national scale rating (NSR) in Nigeria. All global scale
short-term issuer ratings were affirmed at Not-Prime. The outlook on all
long-term issuer ratings remains stable.
Bank of Industry's b2 standalone profile remains unchanged and reflects
(1) its robust capital buffers, with an equity to assets ratio of 34.0% as of
June 2017, (2) a stable liability structure made up of long-term funding at
concessional rates and (3) the tangible improvements to the bank's risk
positioning in recent years. These strengths are balanced against (4) our
expectation that asset quality will be increasingly pressured given then bank's
higher risk exposure to the micro, small and medium-sized enterprises (MSMEs)
segment, which exposes it to riskier assets.
The downgrades are primarily driven by Moody's view that the
government's capacity to provide support for Nigerian banks in times of stress
has weakened as indicated by Moody's recent downgrade of Nigeria's government
bond ratings to B2 stable from B1 stable. The downgrade of the NSR is a result
of the repositioning of the bank's rating within our NSR map following the
aforementioned downgrades of the corresponding global scale ratings.
What Could Move Ratings Up or Down
A demonstrated ability to contain
non-performing loans while maintaining solid core profitability and capital
generation could put upward pressure on the banks' BCAs or lead to a
stabilisation in the outlook in the case of FBN. An upgrade of the banks'
global scale deposit and issuer ratings would be contingent on an improvement
in the operating environment that translates to an upgrade of Nigeria's
sovereign rating.
The ratings could be downgraded in the event
of a further downgrade of the sovereign and/or if we assess that the
government's willingness to provide support in the future will decline below
our current assumptions. The ratings could also be downgraded if we anticipate
that a deterioration in the macro environment poses downside risks for asset
quality and/or the capital generation capacity of the banks beyond what is
already assumed in the ratings.
List of Affected Ratings
Issuer: Access Bank Plc
Downgrades:
....LT Issuer Rating, Downgraded to B2
from B1, Outlook Remains Stable
....LT Bank Deposits (Local Currency),
Downgraded to B2 from B1, Outlook Remains Stable
....LT Bank Deposits (Foreign Currency),
Downgraded to B3 from B2, Outlook Remains Stable
....NSR LT Bank Deposits (Local Currency),
Downgraded to A1.ng from Aa2.ng
....NSR LT Bank Deposits (Foreign
Currency), Downgraded to A3.ng from Aa3.ng
....NSR ST Bank Deposits (Foreign
Currency), Downgraded to NG-2 from NG-1
Affirmations:
....ST Issuer Rating, Affirmed NP
....ST Bank Deposits, Affirmed NP
....NSR ST Bank Deposits (Local Currency),
Affirmed NG-1
....Adjusted Baseline Credit Assessment,
Affirmed b2
....Baseline Credit Assessment, Affirmed
b2
....LT Counterparty Risk Assessment,
Affirmed B1(cr)
....ST Counterparty Risk Assessment,
Affirmed NP(cr)
Outlook Actions:
....Outlook, Remains Stable
Issuer: Bank of Industry
Downgrades:
....LT Issuer Rating, Downgraded to B2
from B1, Outlook Remains Stable
....NSR LT Issuer Rating, Downgraded to
Aa3.ng from Aa1.ng
Affirmations:
....ST Issuer Rating, Affirmed NP
....NSR ST Issuer Rating, Affirmed NG-1
Outlook Actions:
....Outlook, Remains Stable
Issuer: First Bank of Nigeria Limited
Downgrades:
....LT Bank Deposits (Foreign Currency),
Downgraded to B3 from B2
....NSR LT Bank Deposits (Foreign
Currency), Downgraded to A3.ng from A2.ng
....NSR ST Bank Deposits (Foreign
Currency), Downgraded to NG-2 from NG-1
....LT Counterparty Risk Assessment,
Downgraded to B2(cr) from B1(cr)
Affirmations:
....LT Issuer Rating, Affirmed B2, Outlook Remains Negative
....ST Issuer Rating, Affirmed NP
....LT Bank Deposits (Local Currency),
Affirmed B2,
Outlook Remains Negative
....ST Bank Deposits, Affirmed NP
....NSR LT Bank Deposits (Local Currency),
Affirmed A2.ng
....NSR ST Bank Deposits (Local Currency),
Affirmed NG-1
....Adjusted Baseline Credit Assessment,
Affirmed b3
....Baseline Credit Assessment, Affirmed
b3
....ST Counterparty Risk Assessment,
Affirmed NP(cr)
Outlook Actions:
....Outlook, Remains Negative
Issuer: Guaranty Trust Bank Plc
Downgrades:
....LT Issuer Rating, Downgraded to B2
from B1, Outlook Remains Stable
....LT Bank Deposits (Local Currency),
Downgraded to B2 from B1, Outlook Remains Stable
....LT Bank Deposits (Foreign Currency),
Downgraded to B3 from B2, Outlook Remains Stable
....NSR LT Bank Deposits (Local Currency),
Downgraded to Aa3.ng from Aa1.ng
....NSR LT Bank Deposits (Foreign
Currency), Downgraded to A3.ng from Aa3.ng
....NSR ST Bank Deposits (Foreign
Currency), Downgraded to NG-2 from NG-1
....Adjusted Baseline Credit Assessment,
Downgraded to b2 from b1
....Baseline Credit Assessment, Downgraded
to b2 from b1
....LT Counterparty Risk Assessment,
Downgraded to B1(cr) from Ba3(cr)
Affirmations:
....ST Issuer Rating, Affirmed NP
....ST Bank Deposits, Affirmed NP
....NSR ST Bank Deposits (Local Currency),
Affirmed NG-1
....ST Counterparty Risk Assessment,
Affirmed NP(cr)
Outlook Actions:
....Outlook, Remains Stable
Issuer: Sterling Bank Plc
Downgrades:
....LT Bank Deposits (Foreign Currency),
Downgraded to B3 from B2, Outlook Remains Stable
....NSR LT Bank Deposits (Local Currency),
Downgraded to A2.ng from A1.ng
....NSR LT Bank Deposits (Foreign
Currency), Downgraded to A3.ng from A2.ng
....NSR ST Bank Deposits (Foreign
Currency), Downgraded to NG-2 from NG-1
....LT Counterparty Risk Assessment,
Downgraded to B2(cr) from B1(cr)
Affirmations:
....LT Issuer Rating, Affirmed B2, Outlook
Remains Stable
....ST Issuer Rating, Affirmed NP
....LT Bank Deposits (Local Currency),
Affirmed B2, Outlook Remains Stable
....ST Bank Deposits, Affirmed NP
....NSR ST Bank Deposits (Local Currency),
Affirmed NG-1
....Adjusted Baseline Credit Assessment,
Affirmed b3
....Baseline Credit Assessment, Affirmed
b3
....ST Counterparty Risk Assessment,
Affirmed NP(cr)
Outlook Actions:
....Outlook, Remains Stable
Issuer: Union Bank of Nigeria plc
Downgrades:
....LT Bank Deposits (Foreign Currency),
Downgraded to B3 from B2, Outlook Remains Stable
....NSR LT Bank Deposits (Local Currency),
Downgraded to A2.ng from Aa3.ng
....NSR LT Bank Deposits (Foreign
Currency), Downgraded to A3.ng from A1.ng
....NSR ST Bank Deposits (Foreign
Currency), Downgraded to NG-2 from NG-1
....LT Counterparty Risk Assessment,
Downgraded to B2(cr) from B1(cr)
Affirmations:
....LT Issuer Rating, Affirmed B2, Outlook
Remains Stable
....ST Issuer Rating, Affirmed NP
....LT Bank Deposits (Local Currency),
Affirmed B2, Outlook Remains Stable
....ST Bank Deposits, Affirmed NP
....NSR ST Bank Deposits (Local Currency),
Affirmed NG-1
....Adjusted Baseline Credit Assessment,
Affirmed b3
....Baseline Credit Assessment, Affirmed
b3
....ST Counterparty Risk Assessment,
Affirmed NP(cr)
Outlook Actions:
....Outlook, Remains Stable
Issuer: United Bank for Africa Plc
Downgrades:
....LT Issuer Rating, Downgraded to B2 from B1,
Outlook Remains Stable
....LT Bank Deposits (Local Currency),
Downgraded to B2 from B1, Outlook Remains Stable
....LT Bank Deposits (Foreign Currency),
Downgraded to B3 from B2, Outlook Remains Stable
....NSR LT Bank Deposits (Local Currency),
Downgraded to A1.ng from Aa2.ng
....NSR LT Bank Deposits (Foreign
Currency), Downgraded to A3.ng from Aa3.ng
....NSR ST Bank Deposits (Foreign
Currency), Downgraded to NG-2 from NG-1
....Senior Unsecured Regular
Bond/Debenture, Downgraded to B2 from B1,
Outlook Remains Stable
Affirmations:
....ST Issuer Rating, Affirmed NP
....ST Bank Deposits, Affirmed NP
....NSR ST Bank Deposits (Local Currency),
Affirmed NG-1
....Adjusted Baseline Credit Assessment,
Affirmed b2
....Baseline Credit Assessment, Affirmed
b2
....LT Counterparty Risk Assessment,
Affirmed B1(cr)
....ST Counterparty Risk Assessment,
Affirmed NP(cr)
Outlook Actions:
....Outlook, Remains Stable
Issuer: Zenith Bank Plc
Downgrades:
....LT Issuer Rating, Downgraded to B2
from B1, Outlook Remains Stable
....LT Bank Deposits (Local Currency),
Downgraded to B2 from B1, Outlook Remains Stable
....LT Bank Deposits (Foreign Currency),
Downgraded to B3 from B2, Outlook Remains Stable
....NSR LT Bank Deposits (Local Currency),
Downgraded to Aa3.ng from Aaa.ng
....NSR LT Bank Deposits (Foreign
Currency), Downgraded to A3.ng from Aa3.ng
....NSR ST Bank Deposits (Foreign
Currency), Downgraded to NG-2 from NG-1
....Senior Unsecured Regular
Bond/Debenture, Downgraded to B2 from B1, Outlook Remains Stable
....Senior Unsecured MTN Program,
Downgraded to (P)B2 from (P)B1
....Adjusted Baseline Credit Assessment,
Downgraded to b2 from b1
....Baseline Credit Assessment, Downgraded
to b2 from b1
....LT Counterparty Risk Assessment,
Downgraded to B1(cr) from Ba3(cr)
Affirmations:
....ST Issuer Rating, Affirmed NP
....ST Bank Deposits, Affirmed NP
....NSR ST Bank Deposits (Local Currency),
Affirmed NG-1
....ST Counterparty Risk Assessment,
Affirmed NP(cr)
Outlook Actions:
....Outlook, Remains Stable
Principal Methodologies
The principal methodology used in Access
Bank Plc, First Bank of Nigeria Limited, Guaranty Trust Bank Plc, Sterling Bank
Plc, Union Bank of Nigeria plc, United Bank for Africa Plc and Zenith Bank Plc
ratings was Banks published in September 2017.
The principal methodologies used in Bank
of Industry ratings were Finance Companies published in December 2016, and
Government-Related Issuers published in August 2017. Please see the Rating
Methodologies page on www.moodys.com for a
copy of these methodologies.
Moody's National Scale Credit Ratings (NSRs) are intended as relative
measures of creditworthiness among debt issues and issuers within a country,
enabling market participants to better differentiate relative risks. NSRs
differ from Moody's global scale credit ratings in that they are not globally
comparable with the full universe of Moody's rated entities, but only with NSRs
for other rated debt issues and issuers within the same country. NSRs are
designated by a ".nn" country modifier signifying the relevant
country, as in ".za" for South Africa. For further information on
Moody's approach to national scale credit ratings, please refer to Moody's
Credit rating Methodology published in May 2016 entitled "Mapping National
Scale Ratings from Global Scale Ratings".
While NSRs have no inherent absolute meaning in terms of default risk or
expected loss, a historical probability of default consistent with a given NSR
can be inferred from the GSR to which it maps back at that particular point in
time. For information on the historical default rates associated with different
global scale rating categories over different investment horizons, please
see https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1060333.
Regulatory Disclosures
For ratings issued on a program, series or
category/class of debt, this announcement provides certain regulatory
disclosures in relation to each rating of a subsequently issued bond or note of
the same series or category/class of debt or pursuant to a program for which
the ratings are derived exclusively from existing ratings in accordance with
Moody's rating practices. For ratings issued on a support provider, this
announcement provides certain regulatory disclosures in relation to the credit
rating action on the support provider and in relation to each particular credit
rating action for securities that derive their credit ratings from the support
provider's credit rating.
For provisional ratings, this announcement provides certain regulatory
disclosures in relation to the provisional rating assigned, and in relation to
a definitive rating that may be assigned subsequent to the final issuance of
the debt, in each case where the transaction structure and terms have not
changed prior to the assignment of the definitive rating in a manner that would
have affected the rating. For further information please see the ratings tab on
the issuer/entity page for the respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this credit rating action, and whose
ratings may change as a result of this credit rating action, the associated
regulatory disclosures will be those of the guarantor entity. Exceptions to
this approach exist for the following disclosures, if applicable to jurisdiction:
Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.
Regulatory disclosures contained in this press release apply to the
credit rating and, if applicable, the related rating outlook or rating review.
Items
color coded in purple in this Press Release relate to unsolicited ratings for a
rated entity which is non-participating.
The below contact information is provided for information purposes only.
Please see the ratings tab of the issuer page at www.moodys.com,
for each of the ratings covered, Moody's disclosures on the lead rating analyst
and the Moody's legal entity that has issued the ratings.
The relevant office for each credit rating is identified in
"Debt/deal box" on the Ratings tab in the Debt/Deal List section of
each issuer/entity page of the website.
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11. Nigerian Banks Sector Update For September 2017:
Steadying The Ship
12. Federal Republic of Nigeria Ratings Affirmed At 'B-B';
Outlook Stable
13. Dr. Teriba to Discuss Nigeria's Economic Outlook on
September 28
14. Fitch Affirms Nigeria at 'B+'; Outlook
Negative
15. Fitch Revises Its 2017 and 2018 World GDP Growth
Forecasts to 3% and 3.2% Respectively
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