Moody’s assigns ratings to four Nigerian banks

Moody's Investors Service said it assigned ratings to Zenith Bank plc, Guaranty Trust Bank plc, United Bank for Africa plc and First Bank of Nigeria Ltd., four Nigerian banks that account for about 48% of the country's banking assets.

For Zenith and Guaranty Trust Bank, the agency assigned B1 local-currency deposit and issuer ratings with a stable outlook, aligned with the ratings of the Nigerian government. Both banks reach these rating levels solely based on their standalone strength, as indicated by the baseline credit assessments of b1 assigned to the two banks, Moody's highest in Nigeria. The primary drivers for the baseline credit assessments are the two banks’ robust loss-absorbing buffers, low levels of non-performing loans and their resilient liquidity profiles.

For United Bank for Africa, Moody's assigned B1 local currency deposit and issuer ratings, with a stable outlook. These ratings are underpinned by a standalone baseline credit assessment of b2 and one notch of uplift based on Moody's view of a high likelihood of government support, owing to the bank’s status as a systemically important bank.

For First Bank of Nigeria, Moody's assigned B2 local and foreign-currency issuer and deposit ratings, with a negative outlook. These ratings are underpinned by a standalone baseline credit assessment of b3, which is driven by the bank's strong pre-provision profitability and solid local currency funding profile, moderated by the bank's relatively weak loan book and high provisioning costs, the agency explained.

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