Banking
Fitch Affirms GTBank at ‘B+’ With Negative Outlook
By Modupe Gbadeyanka
The Guaranty Trust Bank Plc’s (GTB) Long-Term Issuer Default Rating (IDR) has been affirmed at ‘B+’ with Negative Outlook by Fitch Ratings.
In a statement issued on Wednesday in London, Fitch Ratings noted that all other ratings of GTB have also been affirmed.
It noted that the bank’s IDRs are driven by the bank’s intrinsic creditworthiness as defined by its Viability Rating (VR). GTB’s VR is constrained by the Nigerian sovereign rating (B+/Negative) and the Negative Outlook on the Long-Term IDR mirrors that on the sovereign rating.
GTB’s VR also considers solid financial metrics that compare well with other large Nigerian banks. Earnings metrics are especially strong and we consider GTB to be the most profitable bank in the sector, consistently achieving an operating return on average assets of at least 5% annually. Strong profitability reflects strong margins and a structurally lower cost base than peers. Non-interest expense as percentage of average assets is consistently below 4%, with most peers touching 5% or higher.
Strong earnings support capitalisation. GTB’s Fitch Core Capital (FCC) ratio of 26.7% is extremely high, although this considers capitalisation of interim earnings without the payment of a year end-dividend. Nevertheless, we expect GTB’s FCC ratio to remain well above 20% following the distribution of dividends. Regulatory capital is also sound with a bank-solo Tier 1 ratio of 22.9%. We consider both foreign and local currency liquidity to be sound.
Asset quality metrics are in line with peers, with a ratio of non-performing loans (NPLs) to gross loans of 3.9% at end-September 2017. NPLs have gradually ticked up as borrowers have faced escalating challenges in Nigeria. However, NPLs have remained well contained. Restructuring of the loan book is common, but not as widespread as we have seen in many other banks, at around 10% of gross loans, while past due but not impaired loans are minimal.
GTB’s National Ratings are a reflection of its relative creditworthiness to the best credits in Nigeria. GTB’s National Ratings consider stronger financial metrics than almost all peers.
The long- and short-term ratings on GTB Finance B.V.’s senior unsecured programme have been affirmed at ‘B+’. The long-term rating of senior debt issued by GTB has also been affirmed at ‘B+’ with a Recovery Rating of ‘RR4’ indicating average recovery prospects.
SUPPORT RATING AND SUPPORT RATING FLOOR
Fitch believes that sovereign support to Nigerian banks cannot be relied on given Nigeria’s weak ability to provide support, particularly in foreign currency. In addition, there are no clear messages from the authorities regarding their willingness to support the banking system. Therefore, the Support Rating Floor of all Nigerian banks is ‘No Floor’ and all Support Ratings are ‘5’. This reflects our view that senior creditors cannot rely on receiving full and timely extraordinary support from the Nigerian sovereign if any of the banks become non-viable.
GTB’s IDRs are sensitive to a rating action on its VR. GTB’s VR is sensitive to a material deterioration in asset quality, which may result from restructured loans in the oil sector not performing under the restructured terms. An upgrade of the bank’s IDRs would require a sovereign upgrade as GTB’s ratings are capped at ‘B+’. However, this is unlikely given the Negative Outlook on the Long-term IDRs of GTB and the Nigerian sovereign.
GTB’s National Ratings are sensitive to a change in its creditworthiness relative to other Nigerian banks.
The long- and short-term ratings on GTB Finance B.V.’s senior unsecured programme and the long-term rating on senior unsecured debt issued by GTB are sensitive to any change in GTB’s IDRs.
SUPPORT RATING AND SUPPORT RATING FLOOR
The SR is potentially sensitive to any change in assumptions around the propensity or ability of the sovereign to provide timely support to the bank.
The rating actions are as follows:
Guaranty Trust Bank Plc
Long-Term IDR affirmed at ‘B+’; Outlook Negative
Short-Term IDR affirmed at ‘B’
Viability Rating affirmed at ‘b+’
Support Rating affirmed at ‘5’
Support Rating Floor affirmed at ‘No Floor’
National Long-Term Rating affirmed at ‘AA-(nga)’
National Short-Term Rating affirmed at ‘F1+(nga)’
Senior unsecured long-term rating affirmed at ‘B+’/’RR4’
Senior unsecured programme long- and short-term ratings of GTB Finance B.V. affirmed at ‘B+/B’/’RR4’
By Adedapo Adesanya
Access Bank Plc, the banking subsidiary of Access Holdings Plc, has entered into a binding agreement with South African-based Bidvest Group Limited for the acquisition of 100 per cent equity stake in Bidvest Bank Limited.
The deal for the 24-year-old South African lender is due to be completed in the second half of 2025, upon regulatory approval.
This shows Access Bank’s further expansion plans in line with goals set by its late founder, Mr Herbert Wigwe.
The agreement to acquire 100 percent stake in Bidvest Bank reflects Access Bank’s commitment to strengthening its footprint in South Africa and consolidating on its position as the continent’s gateway to global markets as it seeks to optimise the benefits of recent acquisitions and accelerate its transition towards a greater focus on efficiencies.
Bidvest Bank, founded in 2000 is a niche and profitable South African financial institution providing a diverse range of services, including corporate and business banking solutions and diverse retail banking products.
As of its year ended June 2024, Bidvest Bank reported total assets equivalent of $665million and audited profit before tax of $20million.
Upon conclusion of this acquisition, Bidvest Bank will be merged with the bank’s existing South African subsidiary to create an enlarged platform to anchor the regional growth strategy for the SADC region.
This is coming just as the bank opened a new branch in Malta as part of efforts to focus on international trade finance after obtaining a banking licence from the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA).
Access Bank said the licence marks a transformative milestone in bolstering Europe-Africa trade flows.
The Maltese branch was established by Access Bank UK Limited, the subsidiary of Access Bank Plc, which is also the subsidiary of Access Holdings Plc, which is listed on the Nigerian Exchange (NGX) Limited.
By Modupe Gbadeyanka
To strengthen Europe-Africa trade ties, Access Bank has opened a new branch in Malta. It will focus on international trade finance, employing approximately 30 people in its initial phase, with plans for controlled expansion over time.
It was learned that this Maltese branch was established by Access Bank UK Limited, the subsidiary of Access Bank Plc, which is also the subsidiary of Access Holdings Plc, which is listed on the Nigerian Exchange (NGX) Limited.
Access Bank Malta Limited commenced operations after obtaining a banking licence from the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA).
Access Bank said the licence marks a transformative milestone in bolstering Europe-Africa trade flows.
Malta, a renowned international financial centre, and a gateway between the two continents, is strategically positioned to play a pivotal role in advancing commerce and fostering economic partnerships.
This strategic expansion into Malta enables The Access Bank UK Limited to leverage growing trade opportunities between Europe and Africa.
It underscores the organisation’s commitment to driving global trade, financial integration, and supporting businesses across these regions.
“By establishing operations in Malta, we will gain a foothold in a market that bridges European and North African economies, moving us one step closer to our goal of becoming Africa’s Gateway to the World.
“It further enhances our bank’s capacity to support clients with innovative solutions tailored to cross-border trade and investment opportunities,” the chief executive of Access Bank, Mr Roosevelt Ogbonna, stated.
“Europe has emerged as Africa’s leading trading partner, driven by initiatives such as the Economic Partnership Agreements between the EU and African regions and the African Continental Free Trade Area (AfCFTA).
“With Europe-Africa economic relations entering a new phase, The Access Bank Malta Limited is ideally positioned to deepen trade and meet the financing and banking needs of our clients in these expanding markets,” the chief executive of Access Bank UK, Mr Jamie Simmonds, commented.
Also speaking, the chief executive of Access Bank Malta, Renald Theuma, said, “Malta is uniquely positioned as a bridge between Europe and Africa, making it an ideal location for our subsidiary. This move allows The Access Bank Malta Limited to engage more closely with customers in Europe and deliver tailored financial solutions that drive growth and connectivity across both continents.”
By Adedapo Adesanya
The International Finance Corporation (IFC) and Goldman Sachs have announced a new partnership with African banks, including Nigeria’s Zenith Bank and Stanbic IBTC Nigeria to support the Goldman Sachs 10,000 Women initiative, a joint programme launched in 2008 to provide access to capital and training for women entrepreneurs globally.
The two Nigerian banks are part of nine financial institutions from across Africa which have agreed to join the 10,000 Women initiative committing to leverage the business education and skills tools the programme provides to create more opportunities for women entrepreneurs across the continent by providing access to business education.
Others banks include Stanbic Bank Kenya, Ecobank Kenya, Ecobank Cote d’Ivoire, Equity Bank Group, Banco Millenium Atlantico – Angola, Baobab Group, and Orange Bank.
Speaking on this, Ms Charlotte Keenan, Managing Director at Goldman Sachs said – “10,000 Women has had a powerful impact to date, but we know that there are more women to reach and more potential to be realized.
“We are delighted to partner with IFC to supercharge the growth of women-owned businesses across Africa, and mainstream lending to female business leaders. We remain committed to supporting entrepreneurs with the access to education and capital that they need to scale.”
Since 2008, the 10,000 Women initiative has provided access to capital and business training to more than 200,000 women in 150 countries.
“This expanded initiative marks a significant step forward in creating equitable economic opportunities for women in Africa, enabling them to build stronger, more resilient businesses and to realize their entrepreneurial goals,” said Ms Nathalie Kouassi Akon, IFC’s Global Director for Gender and Economic Inclusion.
Goldman Sachs’ 10,000 Women initiative complements the Women Entrepreneurs Opportunity Facility (WEOF), launched in 2014 by Goldman Sachs and IFC as the first-of-its-kind global facility dedicated to expanding access to capital for women entrepreneurs in emerging markets.
-
Feature/OPED5 years agoDavos was Different this year
-
Travel/Tourism8 years ago
Lagos Seals Western Lodge Hotel In Ikorodu
-
Showbiz2 years agoEstranged Lover Releases Videos of Empress Njamah Bathing
-
Banking6 years agoSort Codes of GTBank Branches in Nigeria
-
Economy2 years agoSubsidy Removal: CNG at N130 Per Litre Cheaper Than Petrol—IPMAN
-
Banking2 years agoFirst Bank Announces Planned Downtime
-
Sports2 years agoHighest Paid Nigerian Footballer – How Much Do Nigerian Footballers Earn
-
Technology4 years agoHow To Link Your MTN, Airtel, Glo, 9mobile Lines to NIN