The bank of Industry (BoI) has won Fitch’s national long-term rating of ‘AA+(nga)’ and national short-term rating of ‘F1+(nga) owing to its credit worthiness.
Fitch is a renowned international rating agency. This is coming on the heels of a domestic credit rating
of A- secured by BoI from Agusto & Co, a leading Nigerian credit rating agency, which recently affirmed the financial institution’s healthy condition and strong capacity to repay obligations on a timely basis.
At a Long-term Issuer Default Rating (IDR) of ‘BB-’ as well as a negative outlook and a short-term IDR of ‘B’, Fitch advocated increased Federal Government support for BoI to improve the bank’s lending capacity and aid the realisation of its objectives.
According to Fitch, BoI’s long-term IDR is at its Support Rating Floor (SRF) of ‘BB-’, which considers Nigeria’s ability to provide such support conformably, as indicated by the country’s Long-term foreign currency IDR of ‘BB-’.
“BoI’s ratings are driven by and equalised with Nigeria’s sovereign ratings (BB-/Negative/B). They reflect Fitch’s view that if required, there is a moderate probability that the Nigerian authorities would provide extraordinary support to BoI,” Fitch said.
“The moderate probability of support is reflected in BoI’s Support Rating (SR) of ‘3’. The Negative Outlook on BoI’s Long-term IDRs reflects the Negative Outlook on the sovereign rating.
“We also believe that its propensity to provide such support is high, reflecting its 99.9 percent ownership, BoI’s policy role and its strategic importance to economic and industrial development,” it further said.
The rating agency observed that BoI is also highly reliant on the Central Bank of Nigeria (CBN) for its funds, stating that the bank’s IDRs, SR and SRF could be sensitive to any weakening culminating from ability or willingness of Nigeria to support the bank.
“The ratings could also be downgraded in the event of material change in the government ownership and/or any change in the bank’s policy role. An upgrade of the Nigerian sovereign would not necessarily lead to an upgrade of BoIs IDRs. BoI’s National Ratings are sensitive to any change in Fitch’s opinion of BoI’s creditworthiness relative to the best credits in Nigeria”, Fitch added.
Speaking on the rating, Rasheed Olaoluwa, managing director, BoI, said the positive rating is an endorsement of the ongoingtransformation project at BoI and an affirmation of the bank’s strategic intent on adopting global best practices in all aspects of its operations.
“We are determined to make increasing impact in our focus sectors and to continue to set the pace as Nigeria’s leading development bank,” Olaoluwa said.
ODINAKA ANUDU
