Fitch rating: FBN assures customers of viability

…as Diamond shares recover

FirstBank has reacted to the latest Fitch ratings that shaved the bank’s issuer default rating to ‘B’ from B+, and FBN Holdings rating cut to BBB+ from ‘A’

Managing Director of First Bank of Nigeria, Mr Adesola Adeduntan, said that the lender’s business activities are integrated with the Nigerian economy in a way that the bank’s position could be impacted by Nigeria’s overall performance and ratings.

He said First Bank is proud to be associated with the Nigerian economy, but currently working to strengthen risk management processes and launch new digital channels, targeted at two million customers of the bank, in the first instance.

The global rating agency downgraded the national long-term rating of FBN Holdings Plc to ‘BBB+. Fitch ratings also cut the bank of industry’s long-term issuer default rating to ‘B+’ from ‘BB-‘ and support rating to ‘4’ from ‘3’.

The latest Fitch report expects Nigerian banks to remain profitable in 2016 despite slower asset growth and higher loan impairment charges.

Meanwhile, Diamond Bank which had lost about 27 per cent of its share price value in the four trading days on the floor of the Nigerian Stock Exchange has recovered, gaining 3.78 per cent to close at N192.

Embattled Skye Bank has also continued on its losing streak for the fourth day after the Central Bank of Nigeria (CBN) dissolved the top management boards of bank. The bank lost 7.59 percent to close the day at 73 kobo per share – losing over 33 per cent of its share value in four trading days.

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Skye Bank has lost 67.7 percent of its share value within the past year, while Diamond has lost 52.94 percent within the same fiscal year.

Due to capital adequacy issues, the CBN decided to dissolve the top management of Skye Bank, Nigeria’s eight biggest lender, leading to the resignation of Timothy Oguntayo, former chief executive officer (CEO) of the bank.

In the midst of all these, the apex bank, which serves as the industry regulator, says all Nigerian banks are healthy, showing no signs of distress.

“For the avoidance of doubt, the infusion of a new Board and Management for Skye Bank PLC is a proactive regulatory action meant to ensure that the bank does not continue to fail in its relevant prudential ratios. Neither Skye Bank nor any other bank in the industry is in distress,” CBN had said in a statement.

Fitch, one of the big three credit rating agencies in the world, affirmed the IDRs of eight Nigerian commercial banks and affirmed the Viability Ratings (VR) of all the banks.