The foremost global rating agency, Standard & Poor’s Rating Services (S&P), has upgraded Access Bank’s long-term credit rating to ‘BB-’ from ‘B+’ with a stable outlook.
Similarly, the bank’s long-term Nigeria national scale rating was upgraded to ‘ngAA-’ from ‘ngA’, attesting to its continued adherence to global best practices, sound corporate governance and best-in-class risk management framework.
This development is impressive given Access Bank’s stability which insulated it from the gale of rating downgrade witnessed by some of the world’s largest banks last year.
This is the second consecutive upgrade the bank has received in two years and attests to the resilience of the bank and its importance to the Nigerian financial system and economy at large.
The rating review has further affirmed Access Bank’s position amongst Nigeria Tier 1 banks, as the bank is no longer excluded from rating nomenclature that characterises the exclusive league. Correspondingly, the upgrade is an acknowledgement of Access Bank’s successful integration of Intercontinental Bank and its reduction of risk related to foreign currency lending.
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Justifying the rating upgrade, S&P said, “Access Bank completed the integration of Intercontinental Bank in 2012 to become the fifth largest Bank operating in Nigeria, and a highly systemically important financial institution. We believe that the bank’s improved franchise, branch network, and cost of funds will enable it execute its strategy to lend increasingly to Nigeria’s most creditworthy institutions”.
Further, the agency said, “We also think that the risks the bank faces from foreign currency lending, although still relevant, have decreased, due to stronger risk management and lower foreign currency exposure. Consequently, the bank’s credit losses should continue to compare well with those of Nigeria’s top rated banks through the next credit cycle”.
It concluded, saying, “We base our view on the bank’s cost of risk, which has compared favourably with levels of rated peers over the past five years, while stating that the factors highlighted for the upgrade in the bank’s rating would result in future asset quality that compares well with levels at the highest rated banks in Nigeria”.
Over the years, Access Bank has evolved into a financial powerhouse with consistent record of impressive performance and history of creating value for its shareholders. For the year ended December 31, 2012, the bank recorded a profit before tax (PBT) of N44.9 billion. The result showed significant improvements across key profitability indices as the bank’s profit after tax (PAT) grew by 150 percent to N42.9 billion compared with the N17.1 billion recorded in the corresponding period in 2011.
