The Development Bank of Nigeria ( DBN) has been assigned a triple-a (AAA) Long Term National Scale rating by the Global Credit Ratings (GCR), one of the leading rating agencies in Africa.
The conferment, which is the highest rating for financial institutions, is in line with the ‘risk-free’ rating of the Nigerian sovereign and attests to DBN’S strong fundamentals and credibility.
“We appreciate the rigorous and diligent assessment of GCR as it provides an additional layer of independent review of our governance and risk management practice, ESG principles, and broader management of the institution,” said Tony Okpanachi, the managing director/ceo of DBN while expressing his satisfaction on the rating.
According to Okpanachi, the DBN is pleased with the debut rating of “AAA” with a stable outlook from GCR, considered one of the foremost rating agencies in Africa.
More i mportant l y , Okpanachi posits that the outcome of the rating exercise, as expressed in its “AAA” national scale rating, is a testament to DBN balance sheet capacity, quality of the risk asset portfolio, and sound risk management practice.
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‘‘We would continue to adhere to global best practice in market interventions, as we remain committed to alleviating financing constraints faced by MSMES and Small Corporates in Nigeria,” said Okpanachi stating that the bank will ensure the provision of financing and partial credit guarantees to eligible financial intermediaries on a market-conforming and fully financially sustainable basis.
Ijeoma Ozulumba, the executive director, finance/ corporate services of DBN, said the bank will consolidate its lending activities while maintaining strong capitalization, stable funding, and robust liquidity.
Accordingly, she posits that the credit rating reflects the strong credibility of the bank, as it continues to preserve its strong fundamentals. “Our optimism on unlocking credit to the MSMES in a sustainable way that aligns with our ultimate objective of catalyzing inclusive growth and development of the Nigerian economy,’’ said Ozulumba.
She states further that the “AAA” credit by GCR reinforces the unparalleled position of DBN in meeting short and long-term obligations whilst also reflecting the unrivalled strength of the guarantee of its whollyowned subsidiary – Impact Credit Guarantee Limited, which provides credit enhancements to MSMES.
With a capital adequacy ratio above 100 percent, GCR acknowledges that DBN’S strong capitalization and low leverage reinforce the rating strength and provides adequate headroom for scaling operations and growing the risk assets portfolio.
GCR considers DBN’S risk position as “neutral “, with no credit losses from inception to date, moderate intermediate operational risk exposure, absence of foreign exchange risk, and the bank’s sound underwriting process which provides for adequate loan collateral coverage, with good recovery prospect.
“The stable outlook reflects our expectation that DBN will maintain strong capitalization and liquidity metrics over the next 12-18 months. Earnings are projected to be more reflective of core operations as the bank increases risk assets, with GCR’S core capital ratio expected to remain above the 30-35% band to sustain the risk score,” GCR said.
