Banking
Fitch Affirms ‘B’ Rating on Access Bank
By Dipo Olowookere
The Long-Term Issuer Default Rating (IDR) assigned to Access Bank by Fitch Ratings has been affirmed with a Stable Outlook. Also, the Viability Rating (VR) is affirmed at ‘b’.
A statement issued by the rating agency disclosed that the IDRs of Access Bank are driven by its intrinsic creditworthiness as defined by its VR. Like all Nigerian banks, Access Bank’s VR is constrained by the operating environment in Nigeria (B+/Stable).
The fragile economic recovery restrains banks’ growth prospects and asset quality, with the VR reflecting the lender’s position as one of the country’s largest banks with an overall domestic market share of approximately 11 percent, as well as the bank’s sound financial metrics and reasonable capital buffers, which are at the upper end of rated Nigerian banks. Fitch noted that the VR also factors in the bank’s highly concentrated loan book.
Access Bank has subsidiaries in a further six African countries and in the UK and these represent 25 percent of consolidated assets and generated 30% of group pre-tax profit in 1H18.
Operating conditions in Nigeria are recovering given improving oil prices, which support a modest return to economic growth, and US dollar liquidity in the banking system has eased. However, the operating environment for banks is difficult with minimal sector loan growth and pressure on margins and capital.
Access Bank has fairly robust risk controls and systems and its impaired loans/gross loans ratio (5% at end-June 2018) is sound by Nigerian standards and broadly in line with the 5.7% average for its closest Nigerian peers.
Loan loss cover reached slightly above 100% following implementation of IFRS 9 in January 2018. Restructured loans are lower than at other Nigerian banks at approximately 5% of gross loans but Stage 2 loans classified in line with IFRS 9 are, at around 13% of gross loans, broadly in line with peers’.
The top 20 loans at end-June 2018 represented around 40% of total loans, high by international standards but in line with Nigerian peers’. Exposure to the oil sector, 25% of loans at end-June 2018, is lower than the 30% sector average.
According to Fitch, Access Bank’s VR also reflects adequate profitability although this is weaker than at most other immediate peers. Relative earnings weakness reflects a higher cost structure and a modest retail franchise, resulting in higher cost of funding than peers’. Efforts to attract new retail depositors, particularly through digital channels, continue.
It said liquidity ratios are sound, with cash holdings and government securities representing around 40% of total assets. Foreign currency refinancing risks have eased with the bank issuing a five-year $300 million 10.5% Eurobond in October 2016 (issued by Access Finance BV), which partly refinanced a $350 million 7.25% Eurobond bond maturing in July 2017.
Fitch noted that core capital ratios are lower than those reported by immediate peers, although its assessment is that buffers are adequate.
Access Bank absorbed N78.4 billion ($257 million), equivalent to approximately 15% of consolidated end-2017 equity, of additional expected credit loss provisions required in line with IFRS 9. Following this, its Fitch Core Capital (FCC)/risk-weighted assets (RWAs) ratio stood at 18% at end-June 2018 (peers: 22%).
By Adedapo Adesanya
A Nigerian digital lending fintech, Allawee, has collaborated with Mastercard to launch a credit-building card designed to enhance financial access for federal civil servants and National Youth Service Corps (NYSC) members.
This product, facilitated by a secure Mastercard platform and issued in collaboration with Providus Bank, and Remita, provides instant access to credit and financial flexibility to over 720,000 federal civil servants and NYSC members all through the Allawee app.
Despite Nigeria’s significant economic potential, over 70 per cent of bank account holders lack access to credit, according to the National Bureau of Statistics (NBS).
The Allawee credit card promises to address this gap, offering a solution that caters to the unique financial needs of Nigerians.
Nigeria as a market is dominated by debit and prepaid cards, so this initiative aims to promote responsible credit usage, combines seamless digital onboarding, user-friendly features, and responsible credit management tools in one platform.
Launched in December 2024, the Allawee credit card supports the Nigerian government’s objective of increasing credit availability to 50 per cent of working Nigerians by 2030. The card offers a secure and seamless way to access credit while helping users build a credit profile, aligning with Mastercard’s mission to drive financial inclusion.
“We are thrilled to collaborate with Allawee on this innovative credit solution, which aligns perfectly with Mastercard’s commitment to bring one billion people into the digital economy by 2025.
“The Allawee credit card provides instant access to credit while also empowering civil servants and NYSC members in Nigerian to build their creditworthiness, further advancing financial inclusion across the country,” said Mrs Folasade Femi-Lawal, Country Manager and Area Business Head for West Africa at Mastercard.
Users can download the Allawee credit card, apply for a loan, receive approval, and start transacting immediately. Once approved, the credit is disbursed directly onto a co-branded card, giving users full control over their funds. The card allows for flexible usage across POS terminals, ATMs, and online transactions, enabling greater financial freedom.
“We launched this card to help Nigerians gain access to instant, affordable credit while building their credit history. Whether it’s handling daily purchases or taking care of life’s emergencies, our customers now have an easy way to cover expenses.
“With Mastercard, we are giving them the convenience to spend their credit at millions of retail locations in Nigeria and around the world, both online and in-store,” said Mr Ikenna Enenwali, CEO of Allawee.
The Allawee credit card offers instant credit access through a fast, secure, and fully digital application process, with wide acceptance at Mastercard online and physical retail locations globally. Customers benefit from flexible repayment options, choosing their credit limits (up to ₦1,000,000) and repaying in installments over four months.
By Adedapo Adesanya
The Nigerian Communications Commission (NCC) has authorised telecommunications companies to disconnect the Unstructured Supplementary Service Data (USSD) codes assigned to nine financial institutions over a N200 billion debt.
The directive signed by NCC’s Director of Public Affairs, Mr Reuben Muoka, on Tuesday and obtained by Channels Television, noted that the affected banks are to pay the outstanding debts by January 27, 2025, or risk losing access to their USSD codes.
According to the NCC public notice, nine out of 18 financial institutions had not complied with regulatory directives.
The affected financial institutions include Fidelity Bank Plc, First City Monument Bank, Jaiz Bank Plc, Polaris Bank Limited, Sterling Bank Limited, United Bank for Africa Plc, Unity Bank Plc, Wema Bank Plc, and Zenith Bank Plc.
It said while other banks have cleared their debts, the total amount initially owed by the financial institutions was reported to exceed N200 billion.
According to the NCC, some of the invoices have remained unpaid since 2020, and has been a source of tussle for years.
“By the information made available to the commission as at close of business on Tuesday, 14th January 2025, of a total of 18 financial institutions, the nine institutions listed below have failed to comply significantly with the directives in the Second Joint Circular of the Central Bank of Nigeria and the commission dated December 20, 2024, for the settlement of outstanding invoices due to MNOS, some since 2020,” a part of the notice read.
The affected USSD codes include *770#, *919#, and *822#, among others, could be reassigned to other applicants if the debts remain unresolved.
The regulator noted that banks’ failure to comply with the CBN-NCC joint circular also means that they are unable to meet the good standing requirements for the renewal of the USSD codes assigned to them by the commission.
It added, “In fulfilment of its consumer protection mandate, the commission wishes to inform consumers that they may be unable to access the USSD platform of the affected financial institutions from January 27, 2025.”
The NCC emphasised that the financial institutions had been duly notified of the need for immediate compliance and warned that consumers may face service disruptions if the issues remain unresolved.
By Adedapo Adesanya
The Nigerian Communications Commission (NCC) has authorised telecommunications companies to disconnect the Unstructured Supplementary Service Data (USSD) codes assigned to nine financial institutions over a N200 billion debt.
The directive signed by NCC’s Director of Public Affairs, Mr Reuben Muoka, on Tuesday and obtained by Channels Television, noted that the affected banks are to pay the outstanding debts by January 27, 2025, or risk losing access to their USSD codes.
According to the NCC public notice, nine out of 18 financial institutions had not complied with regulatory directives.
The affected financial institutions include Fidelity Bank Plc, First City Monument Bank, Jaiz Bank Plc, Polaris Bank Limited, Sterling Bank Limited, United Bank for Africa Plc, Unity Bank Plc, Wema Bank Plc, and Zenith Bank Plc.
It said while other banks have cleared their debts, the total amount initially owed by the financial institutions was reported to exceed N200 billion.
According to the NCC, some of the invoices have remained unpaid since 2020, and has been a source of tussle for years.
“By the information made available to the commission as at close of business on Tuesday, 14th January 2025, of a total of 18 financial institutions, the nine institutions listed below have failed to comply significantly with the directives in the Second Joint Circular of the Central Bank of Nigeria and the commission dated December 20, 2024, for the settlement of outstanding invoices due to MNOS, some since 2020,” a part of the notice read.
The affected USSD codes include *770#, *919#, and *822#, among others, could be reassigned to other applicants if the debts remain unresolved.
The regulator noted that banks’ failure to comply with the CBN-NCC joint circular also means that they are unable to meet the good standing requirements for the renewal of the USSD codes assigned to them by the commission.
It added, “In fulfilment of its consumer protection mandate, the commission wishes to inform consumers that they may be unable to access the USSD platform of the affected financial institutions from January 27, 2025.”
The NCC emphasised that the financial institutions had been duly notified of the need for immediate compliance and warned that consumers may face service disruptions if the issues remain unresolved.
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