S&P ups First Bank of Nigeria

S&P said it revised the outlook on First Bank of Nigeria Ltd. (FirstBank) to stable from negative and affirmed its B-/B long- and short-term counterparty credit ratings.

At the same time, the agency upgraded the long-term national scale rating on FirstBank to ngBB+ from ngBB and affirmed the short-term national scale rating at ngB.

Furthermore, S&P took the same actions on FirstBank's non-operating holding company, FBN Holdings plc.

S&P said the actions reflect its view that FirstBank's regulatory capital has improved and the risk of breaching regulatory requirements has thus diminished.

In addition, the bank's funding and liquidity remain a credit strength.

Although asset quality remains a weakness, in the agency’s view, it is stabilizing thanks to the steadying of the oil price and new management's efforts.

S&P said it expects FirstBank will continue to display weaker asset quality metrics and lower profitability than other rated top-tier banks in Nigeria in 2017 due to continuing high credit costs. That said, it also believes that the bank's new leadership team will address the legacy asset quality issues and institute more prudent risk management measures.

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