Banking
Fitch Downgrades Diamond Bank over Solvency, Liquidity Risks
By Dipo Olowookere
Fitch Ratings has announced downgrading the Long-Term Issuer Default Rating (IDR) of Nigeria’s Diamond Bank Plc to ‘CCC’ from ‘B-‘.
In a statement on Friday, Fitch said it has also lowered the bank’s Short-Term IDR to ‘C’ from ‘B’ as well as the National Long-Term Rating, which was dropped to ‘B(nga)’ from ‘BB+(nga)’.
The rating agency said the two-notch downgrade of Diamond Bank’s Long-Term IDR reflects uncertainty over its solvency and liquidity in view of very weak asset quality, highly vulnerable capital position as well as tight foreign currency (FC) liquidity ahead of an upcoming maturing $200 million Eurobond in May 2019.
The bank has some contingency plans, such as the sale of its UK subsidiary, but execution may be challenging, especially considering the recent resignation of four board members, it said.
In a statement, Fitch said Diamond Bank’s IDRs are driven by its standalone credit profile, as defined by its Viability Rating (VR).
It noted that the lender’s VR is highly influenced by very weak asset quality, which renders its capital position highly vulnerable to any further deterioration, with the VR also reflecting limited FC liquidity.
In the statement, Fitch said Stage 3 loans under IFRS 9, including past due not impaired, which better captures asset quality in our view, accounted for a very large of 37 percent of gross loans at end-1H18, compared with a reported impaired loans ratio (under IAS39) of 13 percent for the same period.
Diamond Bank’s stage 2 loans were a further 23 percent of gross loans, mostly comprising restructured loans. Diamond Bank has the highest share of problem loans (total stage 2 and stage 3 loans as a proportion of gross loans) among Nigerian rated banks, it said, adding that loan loss allowance cover is very low at 19 percent of stage 3 loans.
“We view Diamond Bank’s capital buffers as limited, given very weak asset quality, despite a relatively high Fitch Core Capital (FCC) ratio of 17.5 percent at end-1H18.
“In our view capital remains highly vulnerable given the bank’s low loan loss allowances. Higher reserve coverage would erode considerably the bank’s capital base. Unreserved stage 3 loans were 110 percent of FCC at end-1H18,” the statement said.
Diamond Bank has a small buffer over its 15 percent regulatory total capital adequacy ratio requirement (Total CAR at 16.3 percent at end-9M18).
Fitch said it understands that Diamond Bank has received the approval from the Central Bank of Nigeria (CBN) to obtain a national banking licence, and therefore lower its minimum total capital requirements to 10 percent. However, it stressed that this is subject to the completion of the sale of the UK subsidiary.
Diamond Bank’s FC liquidity improved in 2017, in line with easing FC liquidity conditions in Nigeria. However, FC liquidity remains tight, as Diamond Bank’s FC loans/customer deposits ratio reached 180 percent at end-1H18.
The bank has a number of large bullet repayments due in the short term, including its $200 million Eurobond maturing in May 2019, $100 million from Afrexim due in March 2019, and $70 million from the International Finance Corporation due in July 2019. The bank had about $300 million of liquid assets held as unrestricted cash and cash equivalents and loans to foreign banks at end-1H18.
“We understand that the bank aims to negotiate the refinancing of international financial institution funding, while the improved cash flows from the oil loan book and the disposal of its subsidiary in the UK will be the main contributors to redeeming the Eurobond.
“However, the refinancing has not yet been agreed, while subsidiary disposal has yet to be approved by the Prudential Regulation Authority in the UK and cash flows from the troubled oil sector are uncertain.
“Therefore we see significant execution risk with this plan. Although FC supply has improved, we do not expect Diamond Bank to be able to swap significant volumes of local currency to repay foreign currency obligations,” Fitch said.
Fitch also noted that Diamond Bank’s Long-Term IDR also considers governance shortfalls following the resignation of four members of the board in October 2018, including the chairman (only appointed in 2018) and three non-executive directors, raising questions around effective oversight and ongoing operational capability of the bank. It may also create difficulties in refinancing its obligations with existing lenders.
It said Diamond Bank’s National Ratings reflect its creditworthiness relative to the country’s best credit and relative to peers operating in Nigeria. The Long-term National Rating has been downgraded by several notches due to its weaker credit profile.
“Diamond Bank’s senior unsecured debt has been downgraded to ‘CCC’/’RR4’, reflecting our assessment that average recoveries are a plausible outcome for senior bondholders in the event of a default, albeit this is sensitive to changes in assumptions,” the statement said.
Furthermore, it said Diamond Bank’s Support Rating (SR) and Support Rating Floor (SRF) reflect uncertainty over the ability of the authorities to support banks, particularly in FC.
In addition, there are no clear messages from the authorities regarding their willingness to support the banking system.
“Our view is that senior creditors cannot rely on receiving full and timely extraordinary support from the authorities should a bank become non-viable. Therefore, the SRF of all Nigerian banks is ‘No Floor’ and all Support Ratings are ‘5’,” the statement added.
Diamond Bank’s IDRs are sensitive to any change in its VR. The VR is sensitive to further weakening of precarious asset quality, including a migration of Stage 2 loans to Stage 3 and from further reserving shortfalls of Stage 3 loans, eroding capital.
The VR is also sensitive to any increase in the probability for being able to meet FC obligations. The VR is also sensitive to continuing governance weaknesses stemming from the resignation of four directors, it stated. Fitch said rating upside is unlikely in the short term given the bank’s very fragile financial position. An upgrade of the bank’s VR may result from reduced execution risk in meeting FC obligations or a structural shift in capitalisation, increasing Diamond’s ability to build loan loss allowances, adding that the bank’s National Ratings are sensitive to a change in its creditworthiness relative to other Nigerian issuers.
By Modupe Gbadeyanka
About N2 billion is expected to be used to finance renewable energy products for customers by the end of 2026 in an effort to accelerate Nigeria’s clean energy transition.
To meet this goal, Sterling Bank is launching Sterling Solar Financing Hubs inside StarTimes retail outlets to embed on-the-spot solar financing at the point of purchase.
From the N2 billion earmarked for this initiative, N600 million has already been used up.
Under this programme, customers can now walk into participating outlets, select their preferred solar solution, receive financial guidance from dedicated Sterling Solar Financing Advisors, and begin the financing process immediately, subject to the bank’s credit assessment.
The first phase of the rollout commenced this July with five Solar Financing Hubs across Lagos, located in Lekki, Ikeja, Festac, Surulere, and Victoria Island.
The network will expand rapidly to 46 StarTimes outlets nationwide before the end of the third quarter of 2026, with a view to extending the model to more than 200 StarTimes locations nationwide.
Both parties have promised to continue working together to democratise access to clean energy financing, empowering more Nigerians to solarise their homes and businesses while contributing to a greener future.
“Sterling exists to enrich lives, and we believe that access to clean, reliable energy should be within everyone’s reach. Through this partnership with StarTimes, we are democratising access to solar by bringing financing directly to the point of need, enabling more families and businesses to transition to sustainable energy without the burden of prohibitive upfront costs. This is about unlocking opportunity, improving livelihoods, and powering Nigeria’s future,” the Divisional Head of Renewable Energy and Mobility at Sterling Bank, Mr Darlington Nwankwo, said.
Also commenting, the Vice President of StarTimes Nigeria, Mr Eric Xiao, said, “With the rollout of the Sterling Solar Financing Hubs, we are doing more than just selling solar products; we are building a sustainable energy ecosystem. By integrating StarTimes’ extensive service network with Sterling Bank’s professional financial services, we are significantly lowering the barrier for Nigerian households and small businesses to access clean energy.
“Moving forward, we will continue to deepen this partnership, ensuring that more Nigerians can enjoy reliable, affordable, and smart energy solutions, ultimately turning our vision of energy accessibility into a reality for all.”
By Modupe Gbadeyanka
The Nigeria Business Summit Regional Tour of Stanbic IBTC Bank made a detour to Jogor Centre, Ibadan, Oyo State, on Wednesday, July 15, 2026, to empower Micro, Small, and Medium Enterprises (MSMEs).
The event brought together business leaders, development partners and government representatives to discuss pathways for sustainable enterprise development across the South-West.
Participants engaged in practical masterclasses on export opportunities; access to finance and business growth strategies; gaining actionable insights into market expansion; trade documentation; credit readiness; financial record-keeping; and structured financing solutions designed to support long-term business success.
The Head of Enterprise Banking at Stanbic IBTC Bank, Ms Olajumoke Bello, informed participants that the programme is part of the lender’s commitments to supporting MSMEs through practical business education, strategic partnerships and improved access to growth opportunities.
The Executive Director of Business and Commercial Banking at Stanbic IBTC Bank, Mr Remy Osuagwu, on his part, said, “Our ambition is to be more than a financial institution to Nigerian businesses. We want to be a trusted growth partner, providing the financing, business insights and advisory support entrepreneurs need to build sustainable enterprises and unlock new opportunities.”
Similarly, the chief executive of Stanbic IBTC Bank, Mr Wole Adeniyi, who reinforced the company’s commitment to enterprise development, highlighted the importance of providing businesses with the right support structures to enable sustainable growth and long-term competitiveness.
“At Stanbic IBTC, we believe that sustainable economic growth depends on the success of small and growing businesses. That is why we are focused on providing access to finance, practical advisory support and the connections businesses need to move from ambition to scale,” he stated.
The Oyo State Commissioner for Investment, Trade, Cooperatives, and Industry, Professor Soliu Adelabu, said the initiative was designed to support businesses and strengthen the state’s entrepreneurship ecosystem, praising the bank for its support for traders, entrepreneurs, and artisans in the state.
The Permanent Secretary in the Oyo State Ministry of Women Affairs and Social Inclusion, Mrs O.M. Shotonwa-Roagess, highlighted the importance of strategic partnerships in expanding economic opportunities for women and vulnerable groups across Oyo State. She noted that the ministry remains open to collaborating with organisations such as Stanbic IBTC, development partners and the private sector to drive financial inclusion, entrepreneurship and sustainable economic empowerment.
The Nigeria Business Summit Regional Tour forms part of Stanbic IBTC’s broader commitment to empowering entrepreneurs through capacity building, financial inclusion and strategic business support, helping enterprises unlock new opportunities for growth and long-term success.
The Ibadan leg built on the momentum of previous tour stops in Katsina and Aba.
By Adedapo Adesanya
The Governor of the Central Bank of Nigeria (CBN), Mr Yemi Cardoso, says Nigeria anticipates remittances from citizens living abroad to increase by two-thirds in 2026 as it seeks to bolster its foreign-exchange reserves to $1 billion monthly.
“We are expecting that by the end of the year, we will hit about a billion Dollars a month from diaspora remittances,” he said at the 14th Annual BusinessDay CEO Forum in Lagos on Thursday, themed From Stability to Shared Prosperity.
Mr Cardoso said remittances are expected to be boosted from more than $600 million currently, banking on the CBN’s deliberate target at remittances to diversify reserve sources beyond oil earnings.
According to him, the apex bank engaged Nigerians abroad, banks and international partners to identify barriers to official remittance flows.
He said the lender subsequently reviewed policies to ensure easier movement of funds into and out of the country.
Mr Cardoso described the approach as providing free entry and free exit for foreign exchange.
He said the reforms helped double diaspora inflows within one year and exceeded initial expectations, also projecting annual remittances could reach about $8 billion if the current momentum was sustained, adding that the development reflected growing confidence in Nigeria’s financial system and foreign exchange market.
Mr Cardoso said reforms introduced by the apex bank had restored stability in the foreign exchange market and improved investors’ confidence.
He identified exchange rate unification as one of the central bank’s major achievements under the reforms programme.
According to him, replacing multiple exchange rate windows with a market-driven system eliminated distortions and improved transparency.
Mr Cardoso said improved foreign exchange liquidity and stronger reserves were among the gains from the reforms.
He said Nigeria’s net external reserves had risen from about $3 billion at the start of the reforms to above $40 billion currently, noting that gross external reserves had grown to about $52 billion, representing about 10 months of import cover.
According to him, the reserves are designed to shield the economy from external shocks and excessive market volatility.
He said the reserves were not meant for routine interventions or day-to-day exchange rate management.
