Banking
Fitch Upgrades Access Bank National Rating to ‘A+(nga)’
By Modupe Gbadeyanka
Fitch Ratings has affirmed Access Bank Plc’s Long-Term Issuer Default Rating (IDR) at ‘B’. The Outlook is Stable and at the same time upgraded the lender’s National Long-Term Rating to ‘A+(nga)’ from ‘A(nga)’. All other ratings have been affirmed.
The upgrade of Access’ National Long-Term Rating reflects Fitch’s view of an improvement in its creditworthiness relative to other rated Nigerian institutions. This considers continued expansion of the bank’s franchise and stable asset quality.
Access Bank’s IDRs are driven by the bank’s intrinsic creditworthiness as defined by its Viability Rating (VR). Access’ VR reflects solid financial metrics, which are stronger than most Nigerian banks.
Asset quality metrics compare especially well with its immediate peers. The bank’s stock of non-performing loans has remained under control, comprising 2.6% of gross loans at end-September 2017, the lowest of all large Nigerian banks. In our view, resilient asset quality reflects Access’ good corporate banking franchise and good management stability, including a robust risk management framework. A high Fitch Core Capital ratio (19.6% at end-September 2017) also provides a buffer against potential asset quality deterioration.
Asset quality has remained favourable despite challenging operating conditions in Nigeria, including tight liquidity in both local and foreign currency. Tight liquidity dates back to the sharp fall in oil prices, which has also adversely impacted asset quality sector wide.
Access’ VR also considers adequate profitability, albeit lower than the highest rated Nigerian banks. This reflects a larger cost base and Access’ modest retail franchise, resulting in a higher cost of funding than peers, although low loan impairment charges partially offset this. Access’ smaller retail franchise increases reliance on wholesale funding sources (as evidenced by its higher cost of funding). However, large cash holdings (22% of assets at end-September 2017) provide sufficient liquidity to mitigate this. The refinancing of the bank’s Eurobond in 2016 eased the bank’s foreign currency liquidity position.
Access’ National Ratings are a reflection of its relative creditworthiness to the best credits in Nigeria.
The long- and short-term ratings on Access’ senior unsecured programme have been affirmed at ‘B’. The long-term rating of senior debt issued under the programme has also been affirmed at ‘B’ with a Recovery Rating of ‘RR4’ indicating average recovery prospects.
The long-term rating on subordinated debt issued by Access is notched down once from its VR to ‘B-‘. This reflects higher loss severity compared to senior debt. The Recovery Rating has been affirmed at ‘RR5’, a lower expected recovery than senior debt issued by the bank.
Fitch believes that sovereign support to Nigerian banks cannot be relied on given Nigeria’s (B+/Negative) 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.
RATING SENSITIVITIES
IDRS, VIABILITY RATING AND NATIONAL RATINGS
Access’ IDRs are sensitive to rating action on its VR. Access’ VR is sensitive to a material weakening of liquidity. The VR is also sensitive to a sharp deterioration in asset quality that would erode capital and threaten the bank’s viability. This is not Fitch’s base case. An upgrade of the bank’s IDRs would require continued improvement in financial metrics to the level of the highest rated banks in the country. In particular, a material improvement in the bank’s funding structure in order to capture a greater share of stable low retail cost deposits would be credit positive.
Access’ National Ratings are sensitive to a change in its creditworthiness relative to other Nigerian banks.
The long-term and short-term ratings on Access’ senior unsecured programme are sensitive to any change in Access’ IDRs.
SUBORDINATED DEBT
The long-term rating on subordinated debt issued by Access is sensitive to any change in Access’ VR.
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:
Long-Term IDR affirmed at ‘B’; Outlook Stable
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 upgraded to A+(nga) from ‘A(nga)’
National Short-Term Rating affirmed at ‘F1(nga)’
Senior unsecured long-term rating affirmed at ‘B/RR4’
Senior unsecured short-term rating affirmed at ‘B’
Subordinated long-term rating affirmed at ‘B-‘/’RR5’
By Modupe Gbadeyanka
A civil society organisation, Global Integrity Crusade Network (GICN), has apologised to Guaranty Trust Bank (GTBank) Limited, a subsidiary of Guaranty Trust Holding Company Plc, for making false corruption allegations against the bank.
In a statement made available to Blueprint in Abuja on Tuesday, signed by President of the organisation, Mr Edward Omaga, the group also retracted allegations of corruption and unwholesome activities made in a Private Investigation Report (PIR) against the lender.
Mr Omaga noted that he presented the PIR to the media on October 3, 2024, and later submitted same to certain agencies in Nigeria, the United Kingdom, the United States, and Ghana for further action.
He said the documents relied upon to compile the PIR were obtained from the internet, were baseless, and do not depict the true state of affairs about GTBank Limited and its management.
“In other words, the position taken by Global Integrity Crusade Network in the PIR was misguided. It has become clear that Guaranty Trust Bank Limited, its management and the entire GTCO brand are not under any financial or regulatory scrutiny in Nigeria or abroad as alleged.
“The issues raised about Unsolicited Accounts Opening for customers were unnecessary, as the bank operates in line with the highest standards of compliance and due process, whilst preventing the breach of data privacy laws,” he said.
On the issue of profit declaration for the period ended June 30, 2024, Mr Omaga stated that records abound to show that GTBank Limited fully complied with the applicable legal requirements of the Central Bank of Nigeria (CBN), Financial Reporting Council of Nigeria (FRCN) as well as the Securities and Exchange Commission (SEC).
“It was therefore not appropriate for GICN to query the Audited Consolidated and Separate Financial Statements for the period ended June 30, 2024, released by GTCO Plc to the Nigerian Exchange Group (NGX) and London Stock Exchange (LSE).
“In the same vein, the corporate image and integrity of GTB Limited remains intact in foreign countries where it carries on business.
“The financial penalties paid in the United Kingdom by Guaranty Trust Bank (UK) Limited coupled with the suspension of its Foreign Exchange Trading License in Ghana were minor regulatory issues, which have been sorted out long time ago.
“The group wishes to sincerely apologize through this medium for misleading the public towards having any negative perception about GTBank Limited.
“Specifically, GICN implores Mr. Segun Julius Agbaje, being the Group Chief Executive Officer of GTCO Plc, to forgive its shortcomings and consider the group as a partner in the sustained drive of the bank to provide quality financial services across Nigeria, Africa and the world at large.
“In keeping with its resolve to set the records straight, the group had on Thursday, February 27, 2025, written to withdraw the PIR and all court cases relating to this matter,” he added.
By Dipo Olowookere
An application has been submitted by a foremost mid-level financial institution, Wema Bank Plc, for a rights issue worth about N149.3 billion.
The bank submitted the request to the Nigerian Exchange (NGX) Limited through its stockbrokers, Global Asset Management Nigeria Limited and Qualinvest Capital Limited.
The lender wants approval and listing of the rights issue, with the qualification date today, Wednesday, March 5, 2025, a part of a notice from the bourse said.
The company intends to issue about 14,286,785,417 units of its stocks to qualified shareholders at a unit price of N10.45, the disclosure stated.
The shares would be sold on the basis of two new equities for every three held by existing investors of the organisation, which hopes to raise funds to meet its new minimum capital requirements.
Recall that the Central Bank of Nigeria (CBN) gave banks operating in the country till March 31, 2026, to shore up their capital base.
Deposit Money Banks (DMBs) with international presence were asked to increase their capital base from the previous N25 billion to N500 billion, while those with national banking licence are to have at least N200 billion, with regional banks mandated to raise their minimum capital to N50 billion.
“Trading license holders are hereby notified that Wema Bank Plc has through its stockbrokers, Global Asset Management Nigeria Limited and Qualinvest Capital Limited, submitted an application to Nigerian Exchange Limited for the approval and listing of a rights issue of 14,286,785,417 ordinary shares of 50 Kobo each at N10.45 per share on the basis of two new ordinary shares for every three ordinary shares held as at the close of business on Wednesday, March 5, 2025.
“The qualification date for the rights issue is today, March 5, 2025,” the statement signed by the Head of Issuer Regulation Department at NGX, Mr Godstime Iwenekhai, said.
Business Post reports at the stock market today, Wema Bank lost 8.33 per cent or N1 to settle at N11.00 per share compared with Tuesday’s closing value of N12.00 per share.
By Modupe Gbadeyanka
The United Bank for Africa (UBA) Plc has fixed N600 as the fees to be charged for every N20,000 withdrawn at its Automated Teller Machines (ATMs) mounted outside its premises.
The lender confirmed this development in a message to its customers on Tuesday, March 4, 2025, a copy which was sighted by Business Post.
Recall that last month, the Central Bank of Nigeria (CBN) announced fresh fees on ATM withdrawals from Saturday, March 1, 2025.
In a circular signed by its Acting Director of Financial Policy and Regulation Department, Mr John Onojah, the central bank said it revised the charges to address rising operational costs and enhance efficiency in the banking sector.
It emphasised that the action was in line with Section 10.7 of the CBN guide to charges by banks, other financial and non-bank financial institutions (2020).
The last review of ATM transaction charges happened in 2019 when the CBN reduced the withdrawal fees from N65 to N35.
“In response to rising costs and the need to improve the efficiency of Automated Teller Machine (ATM) services in the banking industry, the Central Bank of Nigeria (CBN) has reviewed the ATM transaction fees prescribed in Section 10.7 of the extant CBN Guide to Charges by Banks, Other Financial and Non-Bank Financial Institutions, 2020. (the Guide),” the CBN said.
“This review is expected to accelerate the deployment of ATMs and ensure that financial institutions apply appropriate charges to consumers of the service.
“Accordingly, banks and other financial institutions are advised to apply the following fees with effect from March 1, 2025.”
According to the new policy, customers withdrawing from their bank’s ATMs (on-us transactions) will continue to enjoy free withdrawals, but a N100 fee per N20,000 withdrawal will be applied at on-site ATMs (those located at bank branches).
For withdrawals at ATMs of other banks (Not-on-Us transactions), an off-site withdrawal will attract a N100 fee plus a surcharge of up to N500 per N20,000 withdrawal.
In its message, UBA said customers will continue to enjoy “free withdrawals at UBA ATMs,” but will part with “N100 per withdrawal at other banks ATMs, and N600 per withdrawal at ATMs outside the bank’s premises,” adding that, “For international transactions, charges will reflect the fees set by the bank handling the transaction.”
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