Fitch reiterates Ecobank Nigeria’s stable outlook

Adebayo Obajemu

Fitch Ratings has again reiterated Ecobank Nigeria Limited’s (ENG) Long-Term Issuer Default Rating (IDR) at ‘B-‘ with a Stable Outlook.

It has also simultaneously upgraded the bank’s National Short-Term Rating to ‘F2(nga)’ from ‘F3(nga)’. The rating agency says the IDRs of Ecobank Nigeria are driven by its standalone creditworthiness, as expressed by its Viability Rating (VR) of ‘b-‘, stating that the bank has a moderate market shares of Nigeria’s banking-sector assets but its franchise benefits from being a subsidiary of Ecobank Transnational Incorporated, a large pan-African banking group with operations spanning 33 countries across sub-Saharan Africa (SSA).

It said that Ecobank’s loans have plummeted in recent years, noting that it does not see a high risk of the largest Stage 2 loans, which are concentrated within the oil and gas sector, of becoming impaired.

Fitch hinted that “ENG’s total capital adequacy ratio (CAR) of 19.6% at end the first quarter of 2021 maintains a comfortable buffer above the 10% regulatory requirement for a bank with a national licence and the bank’s tangible leverage ratio of 10.7% at the end of first quarter of 2021 which compares favourably with that of peers.