Fitch puts Ecobank on watch

Fitch Ratings said it placed its B- ratings for Ecobank Transnational Inc., Ecobank Nigeria Ltd. (ENG) and EBN Finance Co BV on rating watch negative.

The RWN follows Nigeria’s naira being devalued, the agency said.

“The RWN reflects the risk of the entities breaching their respective minimum capital requirements due to the direct effect of the devaluation. For ENG it also reflects increased risks to capital from large foreign-currency (FC) problem loans (stage 2 and stage 3 under IFRS 9) that have been inflated by devaluation, which may necessitate greater prudential provisions and exert further pressure on the bank's total capital adequacy ratio (CAR), in addition to broader loan quality risks stemming from the devaluation,” Fitch said in a press release.

The agency said it aims to resolve the RWN within six months.

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