Banking
AU Lambasts Fitch For Downgrading Afreximbank
By Adedapo Adesanya
The credit review body of the African Union (AU), African Peer Review Mechanism (APRM), and Fitch ratings agency have engaged in a mild row following the latter’s recent downgrade of the Africa Export-Import Bank (Afreximbank).
Last Wednesday, Fitch downgraded the Cairo-based lender’s credit rating to BBB-, one notch above junk ratings, from BBB, citing high credit risks and weak risk management policies.
Fitch calculated that the ratio of Afreximbank’s non-performing loans (NPLs) exceeded the 6 per cent high-risk threshold outlined in the ratings agency’s criteria.
For Afreximbank, it said in its first quarter operating results ending March 31, the NPLs ratio stood at 2.44 per cent.
APRM in response said the rating was based on a “flawed” categorisation of loans and calling for the decision to be reconsidered.
APRM, a body established by the African Union to do the groundwork for the launch of an African credit ratings agency later this year, contested Fitch’s calculations and called for talks between Fitch, Afreximbank, and other African institutions.
“The APRM notes with concern Fitch Ratings’ misclassification of Afreximbank’s sovereign exposures to the Governments of Ghana, South Sudan and Zambia as NPLs,” APRM said in a statement published recently.
“This classification raises critical legal, institutional and analytical issues which the APRM strongly contests.”
Meanwhile, Fitch defended its rating decision, saying it operates on the basis of independent and timely analysis.
“All Fitch’s supranational rating decisions are taken solely in accordance with one globally consistent and publicly available rating criteria, with rating drivers and sensitivities clearly identified in our ongoing public rating commentary,” the ratings agency said.
The row over the rating, which determines the cost of credit for a financial institution, comes as Afreximbank seeks to protect its loans from restructuring in Ghana, Zambia and Malawi, saying that as a multilateral lender it has preferred creditor status.
“The assumption that Ghana, South Sudan and Zambia would default on their loans to Afreximbank is inconsistent with the 1993 Treaty establishing the Bank to which Ghana and Zambia are both founding members, shareholders and signatories,” APRM said.
The founding treaty of the lender, whose mandate is to promote intra-Africa and extra-Africa trade, is legally binding on all members, APRM said, placing legal obligations on the bank’s financial operations.
Afreximbank has not commented on the downgrade by Fitch, but it has previously said it is not in debt restructuring talks with any of its member states.
Afreximbank’s loans to its member states are governed by “a framework of intergovernmental cooperation and mutual commitment, rather than typical commercial risk principles”, shielding its loans from sliding into non-performance realm, APRM said.
“Fitch’s unilateral treatment of these sovereign exposures -as comparable to market-based commercial loans – despite their backing by treaty obligations and shareholder equity stakes, is flawed,” APRM said.
By Dipo Olowookere
The national scale long rating of Wema Bank Plc has been upgraded by GCR Ratings to BBB+(NG) from BBB(NG) as its short-term issuer rating was also moved higher to A2(NG) from A3(NG).
In a statement obtained by Business Post, the rating firm also disclosed that it has raised the national scale long-term issue rating on Wema Funding SPV’s N17.675 billion Series 2 Fixed Rate Unsubordinated Bonds to BBB(NG) from BBB-(NG).
It was stated that the lender, which retained a stable outlook, achieved this rating upliftment because of its “strengthened capitalisation driven by equity injection, and improved earnings generation and retention.”
“The ratings also balance the bank’s stable funding structure, sound liquidity, modest competitive position, and weakening asset quality metrics, exacerbated by the macroeconomic challenges,” it added.
GCR noted that it kept the bank’s outlook stable due to expectations that the core capital ratio should range above 20 per cent over the next 12-18 months, underpinned by the successful capital injection.
“We expect the bank’s asset quality metrics to be contained within the regulatory minimum and industry average. The bank’s funding structure and liquidity profile is expected to remain strong,” a part of the statement said.
However, it was emphasised that Wema Bank’s risk position remains pressured by the macroeconomic challenges, potentially increasing credit and market risks.
“Positively, we note that the bank has implemented loan recovery efforts, remedial actions, and a cautious lending strategy,” it stated.
Wema Bank’s competitive position is largely enhanced by its strong digital presence, which continues to support a growing customer base of over 5 million and increased transaction volumes.
With a balance sheet size of N3.6 trillion as of December 31, 2024, the financial institution accounted for about 2.0 per cent of the Nigerian banking industry’s total assets, customer deposits, and gross loans.
Operating revenue grew by 48 per cent to N255.8 billion last year, with the relatively stable net-interest income contributing a sizeable 69.2 per cent of the total operating revenue.
“Looking ahead, Wema Bank’s expansion drive, increased deployment of technology, and strategic partnerships could support its operational scale and earnings generation capacity over the next 12-18 months,” GCR stated.
By Adedapo Adesanya
The African Export-Import Bank (Afreximbank) has reaffirming its strong financial position, rigorous risk management framework, and adherence to international reporting standards following issues around Fitch Ratings report.
Recall that Fitch Ratings, in its June 4, 2025, assessment, downgraded the bank’s credit rating one place above junk, as well as its substantial provisions on sovereign exposures, which reduce potential financial risks.
However, Fitch acknowledged Afreximbank’s strong capitalization, including its strong equity to assets and guarantees ratio and excellent internal capital generation.
The issue has led to a mild row between the African Union and the agency, with plans to launch an Africa-focused credit rating agency now in focus.
In the statement on Tuesday, Afreximbank emphasized that its financial reporting strictly follows International Financial Reporting Standards (IFRS), including IFRS 9, which governs loan classification and non-performing loan (NPL) assessments.
The bank clarified that while Fitch’s NPL definition differs from its forward-looking approach, its methodology is fully detailed in its 2024 Financial Statements and independently verified by external auditors.
Fitch’s negative outlook was attributed to concerns over potential sovereign debt restructuring involving Afreximbank’s member states.
However, the bank firmly stated that its establishment treaty—signed by all 53 participating African states—prohibits it from engaging in sovereign debt restructuring negotiations.
“Afreximbank would like to reaffirm that it is not participating in debt restructuring negotiations related to any of its member countries,” the statement read. “To do so would be inconsistent with the bank establishment treaty, which governs our operations.”
Fitch also recognized Afreximbank’s low concentration risk and strong liquidity position, rating its treasury assets as high quality, with the lender reiterating that its risk management framework remains robust, supported by its solid capitalization and prudent financial policies.
“Afreximbank remains steadfast in its mission to drive trade-led growth, economic development, and macroeconomic stability across Africa.
“Despite external assessments, the Bank expressed confidence in its financial resilience, governance standards, and unwavering commitment to its member states,” it added.
“Our financial strength, governance, and dedication to Africa’s prosperity remain unshaken,” the statement concluded. “We will continue to support our member countries in overcoming economic challenges while advancing sustainable development.”
By Modupe Gbadeyanka
The federal government has explained that it discontinued the criminal charges against the chief executive of Fidelity Bank Plc, Mrs Nneka Onyeali-Ikpe in the best interest of the public.
In a statement issued on Monday, June 9, 2025, a spokesperson in the Office of the Attorney General of the Federation and Minister of Justice, Mr Kamarudeen Ogundele, disclosed that continuing with the case against the banker would be against the rule of law, fairness and justice.
However, the Nigerian government emphasised that the charges against the financial institution remains intact, appealing to members of the public to “allow the legal process to run its course and to refrain from speculation or jumping to conclusions.”
The government explained that the decision of the Attorney General of the Federation (AGF) and Minister of Justice, Mr Lateef Fagbemi (SAN) to discontinue the criminal charges against Mrs Onyeali-Ikpe was “a testament to the office’s commitment to upholding justice and fairness.”
“As the chief law officer of the federation, the AGF has the constitutional power to enter a nolle prosequi, discontinuing a prosecution where it is deemed necessary to prevent a miscarriage of justice,” the statement noted.
According to the statement, “This decision followed a careful review of the case which did not connect Dr Onyeali-Ikpe to the charge as she was neither the account officer nor the Managing Director of the Fidelity Bank when the account used in the alleged scheme of fraud was opened.”
“This decision does not to exculpate Fidelity Bank from the allegations contained in the charge which is still pending before the court, but rather a demonstration of the Attorney General’s duty to ensure that justice is served,” it stated.
“The AGF will ensure that the best interest of justice is served at all times and that all those found wanting, at any time, face the full weight of law to serve as a deterrent to others,” the statement concluded.
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