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Zenith Bank, GTBank Remain Strongest in Nigeria Despite Fitch Downgrade



Zenith Bank, GTBank Remain Strongest in Nigeria Despite Fitch Downgrade

Zenith Bank, GTBank Remain Strongest in Nigeria Despite Fitch Downgrade

By Modupe Gbadeyanka

GTBank and Zenith have emerged the highest rated banks in Nigeria with Long-Term IDRs and VRs of ‘B+’ and ‘b+’ respectively despite the revision of four Nigerian Banks’ Outlook to Negative by Fitch Ratings this week.

According to the world leading rating agency, the ratings of the two banks are driven by solid company profiles, management quality and strong through-the-cycle performance.

In a statement issued by Fitch on Wednesday, The IDR Outlooks on Zenith and GTB (both at B+) were revised to Negative following a recent similar action on Nigeria’s (B+) Outlook, but despite this, they still remain the highest rated banks in Nigeria.

The Negative Outlooks on their Long-Term IDRs reflect Fitch’s view that they cannot be rated above the sovereign due to the close correlation between the domestic operating environment and their credit profiles, including large holdings of government securities.

The statement noted that the IDRs of all the banks (except SIBTC/SIBTCH) are driven by Fitch’s assessment of their standalone creditworthiness as captured in their Viability Ratings (VRs).

The IDRs are all in the ‘B’ range, indicating highly speculative fundamental credit quality, and factor in the banks’ weakened credit profiles due to challenging macro-economic conditions and market volatility.

The operating environment continues to be affected by the oil price shock, slow GDP growth, continuing pressure on the naira, scarcity of hard currency in the FX interbank market and policy uncertainty.

The VRs continue to be pressured by tight foreign currency liquidity, asset quality deterioration and limited capital buffers. The sector remains largely profitable, but operating profits in 2016 were inflated by foreign currency revaluation gains (due to the sharp depreciation of the naira in June 2016). Foreign currency-adjusted ‘normalised’ operating profit, although still healthy, is vulnerable to rising loan impairment charges (LICs). As a consequence, the banks VRs remain in the highly speculative ‘b’ range.

Fitch said it is monitoring the banks’ ability to meet maturing external obligations given current difficult market conditions and limited supply of foreign currency from the Central Bank of Nigeria (CBN).

The new foreign-exchange regime has provided limited respite in accessing foreign currency in the interbank market. FX forward contracts provided by the CBN since June 2016 have helped the banks access foreign currency to reduce a large backlog of overdue trade finance obligations. These were either extended or refinanced with international correspondent banks.

Further depreciation of the naira against the US dollar would negatively impact banks’ regulatory capital ratios due to the translation effect of risk-weighted assets (RWAs). Some banks have limited buffers over regulatory minimums and further erosion of capital ratios beyond our expectations could be credit-negative.

Fitch said UBA’s VR reflects the bank’s strong franchise and company profile, which includes a broad pan-African footprint, as well as healthy financial metrics, including adequate capital and leverage ratios and resilient earnings.

Access’s VR reflects the bank’s expanding franchise and market share as well as a strengthened business model and good track-record of execution. The rating also considers the bank’s healthy financial profile, including strong asset quality and capital ratios.

FBNH’s and FBN’s VRs reflect the group’s traditionally strong franchise and company profile in Nigeria and regionally and a large retail network. The VRs also factor in the bank’s very high non-performing loans (NPL) ratio, large loan concentrations to the oil sector and weak capital position. The Outlook on the Long-Term IDRs is revised to Negative to reflect continued pressure on capital as addressing its substantial asset quality problems will likely take time.

Diamond’s VR reflects the bank’s high risk appetite and weaker earnings. The Outlook on the Long-Term IDR is revised to Negative to reflect a very tight foreign currency liquidity position and pressure on capital arising from weak asset quality.

Fidelity’s VR reflects the institution’s strong second-tier franchise and sound capital ratios as well as sensitivity to high credit concentrations and weak earnings.

FCMB’s VR reflects the bank’s limited company profile, exposure to higher-risk segments, tight foreign currency liquidity and weak earnings generation.

Union’s VR reflects a high NPL ratio compared with peers, tight foreign currency liquidity and modest, albeit improving, revenue generation. It also reflects pressure on regulatory capital ratios, which the bank intends to address by raising core capital.

Wema’s VR reflects the bank’s small franchise, modest earnings and profitability and still low capital buffers. It also reflects a lower proportion of foreign currency assets and liabilities than peers’, meaning it is less affected by current liquidity pressures.


The Support Ratings of ‘5’ and Support Rating Floors of ‘No Floor’ for all the banks reflect sovereign support is possible but cannot be relied upon.

Fitch said it believes that the Nigerian authorities retain a willingness to support the banks, but their ability to do so in foreign currency is weak due to Nigeria’s low foreign currency reserves and revenues. In addition, we have limited confidence that any available reserves will be used to support the banks rather than to execute other priority policy objectives.

FBNH’s Support Rating of ‘5’ also reflects Fitch’s view that the authorities retain a low propensity to provide support to bank holding companies that do not have significant senior obligations.


The senior debt ratings of Zenith, Access (issued via the bank and Access Finance BV), GTB (issued via GTB Finance BV), Diamond and Fidelity are in line with their respective Long-Term IDRs.

The subordinated debt ratings of FBN (issued via FBN Finance BV) and Access are rated one notch below their respective VRs to reflect higher-than-average loss severity for subordinated relative to senior debt. No additional notches for non-performance risk have been applied.


National Ratings reflect Fitch’s opinion of each bank’s creditworthiness relative to the best credit in the country. We have downgraded the National Ratings of FBN/FBNH and Diamond to reflect their weaker financial metrics relative to peers.

SIBTC’s and SIBTCH’s National Ratings are based on the probability of support from their parent, Standard Bank Group Limited (SBG; BBB-/Negative). SBG has a majority 53.2% stake in SIBTCH, which owns 100% of SIBTC. Fitch believes SBG’s support would extend equally to both the bank and the holding company.



The IDRs are sensitive to rating action on the banks’ respective VRs. This is mostly likely to be triggered by further asset quality and capital deterioration as well as continued pressure on foreign-currency funding and liquidity.

FBN/FBNH’s and Diamond’s VRs face heightened sensitivity to a downgrade if asset quality, and therefore capitalisation, continues to deteriorate. For Diamond, additional weakening of its foreign currency liquidity position is also a rating sensitivity given its foreign currency refinancing risks.

Upside is limited for all banks’ VRs due to the difficult operating environment.


Upside to the SRs and SRFs of all banks is unlikely in the near term due to the recent downgrades and revisions (in November 2016). In the medium term, positive rating action could result from a significant improvement in the sovereign’s foreign-currency reserves and a significant improvement in foreign-currency liquidity in the system. It may also be triggered by clear evidence of timely extraordinary sovereign support for domestic banks, if required.


The banks’ National Ratings are sensitive to changes in their creditworthiness relative to other Nigerian entities. The National Ratings of SIBTC and SIBTCH are sensitive to a change in potential support (relating to both ability and propensity) from their ultimate parent, SBG. The National Ratings of SIBTCH and SIBTC could withstand a two-notch downgrade of SBG’s Long-Term IDR.


The senior debt ratings of Zenith, Access (issued via the bank and Access Finance BV), GTB (issued via GTB Finance BV), Diamond and Fidelity are sensitive to a change in their Long-Term IDRs.

The subordinated debt ratings of FBN (issued via FBN Finance BV) and Access are sensitive to a change in their VRs.

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.


Stanbic IBTC Processes First Inbound Commercial Transaction on PAPSS



Stanbic IBTC opens new branch

By Modupe Gbadeyanka

Stanbic IBTC Bank Plc has processed its first inbound commercial transaction on the recently-launched Pan African Payment and Settlement System (PAPSS) in Nigeria.

PAPSS was designed by the African Union and the AfCFTA Secretariat to provide a secure and efficient payment platform for African businesses, promoting intra-African trade and economic integration by facilitating payments and settlements for cross-border transactions within Africa in local currencies.

The transaction carried out by the bank was worth N5 million, according to a statement from the company, and it was for a key corporate client from Ghana Commercial Bank (GCB).

It was stated that the transaction occurred on Friday, March 3, 2023, and the recipient was Chapel Hill Denham, which has expressed satisfaction with the seamless and efficient processing of the PAPSS platform, noting that it has the potential to unlock immense opportunities for African businesses.

“We are delighted to have successfully processed our first inbound commercial transaction on PAPSS. This deal underscores our pledge to provide our clients with efficient and secure payment and settlement solutions that support their growth and expansion across Africa.

“We look forward to leveraging our expertise and the capabilities of PAPSS to enable more African businesses to tap into the opportunities presented by intra-African trade,” the chief executive of Stanbic IBTC Bank, Mr Wole Adeniyi, said.

Also, the Head of Transaction Banking at Stanbic IBTC Bank, Jesuseun Fatoyinbo, expressed confidence in the PAPSS platform, saying, “This is a testament to the effectiveness of PAPSS in facilitating cross-border payments and settlement in a fast, secure, and cost-effective manner.

“We are proud to be at the forefront of this initiative and commend the efforts of Afreximbank and the African Union in developing the PAPSS platform and promoting intra-African trade.”

On his part, the chief executive of PAPSS, Mr Mike Ogbalu III, said, “We are delighted that Stanbic IBTC has completed its first inbound commercial transaction on PAPSS.

“This is a significant step towards achieving our goal of promoting intra-African trade and facilitating cross-border payment and settlement of transactions in African currencies.

“We believe that PAPSS has the potential to revolutionize the way businesses trade and settle transactions in Africa.”

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Parallex Bank Gets $10m to Finance Cross-Border Trades of SMEs



Parallex Bank

By Aduragbemi Omiyale

A trade finance facility worth $10 million has been secured by a Nigerian lender, Parallex Bank Limited, and the funds would be used to support small and medium enterprises (SMEs) involved in cross-border trades.

The money was given to Parallex Bank by Afreximbank as part of its efforts to bridge the financing gap for businesses.

A statement from the Nigerian bank said the $10 million would be used to support other pan-African business opportunities its growing SME segment, as well as for emerging commercial and corporate banking businesses.

In addition, the funds would be used by to facilitate, through on-lending, access to cross-border trade finance for SMEs and to create lines of credit for businesses operating in the agriculture, export industry, health, education and renewable energy sectors.

These would be achieved through Afreximbank’s technical assistance in capacity development and other training programmes geared towards solidifying the relationship between the two institutions.

The chief executive of Parallex Bank, Mr Olufemi Bakre, has described the facility as a testament to the “confidence that Afreximbank has in Parallex Bank.”

“It helps us to materialise our strategy of building ecosystem partnerships to support critical sectors of Nigeria’s economy for growth and development,” Mr Bakre, promising that the bank will “engage in product-based collaborations to increase transaction mileage in specific and strategic segments, such as the creative industry, women-owned and managed businesses, among others.”

On his part, the President and Chairman of the Board of Directors of Afreximbank, Mr Benedict Oramah, explained that the funds were made available to the Nigerian lender to support small business owners on the continent.

“We are pleased to continue to expand the AfTRAF programme across Africa. This financing facility provided to Parallex Bank comes in addition to other trade facilities already in use by our other partner banks in Nigeria and throughout the continent to help bridge the financing gap created by the withdrawal of international correspondent banks,” he remarked.

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Access Bank Issues AfriGO Card to Customers for Robust Payment Ecosystem



Access Bank AfriGO Card

By Aduragbemi Omiyale

Access Bank has become the first financial institution in Nigeria to successfully issue the first live card of Nigeria’s national card scheme called AfriGO Card.

The card system is a product of a financial services business affiliated with the Nigeria Inter-Bank Settlement System (NIBSS), AfriGOpay, and was designed to meet the needs of the Nigerian payment industry.

The scheme is championed by the Central Bank of Nigeria (CBN) and NIBSS to provide innovative solutions to users of financial services in Nigeria, Africa, and across the global markets.

The launch of AfriGO is another milestone in the development of a vibrant and rapidly expanding payments industry.

Consumers demand value in real-time, not just transactions, and with AfriGO, Access Bank says it can provide valuable card benefits, robust loyalty rewards, and a compelling incentive to utilize electronic payments rather than cash.

“It is with excitement that we announce that Access Bank, Nigeria’s largest retail bank with over 60 million customers, is the first financial institution in Nigeria to successfully issue the first live card of Nigeria’s national card scheme- AfriGO,” the Deputy Managing Director for Retail Banking at Access Bank, Mr Victor Etuokwu, said.

“The AfriGO Card has additional benefits because it is designed to facilitate the growth of Nigeria’s payment ecosystem, thereby supporting more tailored payment services.

“It will strengthen payment security, expand financial participation, guarantee data sovereignty, eliminate FX dependency, and provide Nigerians with several other benefits. Cardholders will enjoy increased affordability and more flexible payment options,” he added.

Speaking on the product launch, the Senior Retail Advisor at Access Bank, Mr Robert Giles, said, “The National card scheme operates locally, and it is tailored to the specific needs of the country. We have also recorded successful purchases on POS and ATMs, which began on March 14, 2023.

“Domestic ownership of a local card scheme eliminates demand on foreign exchange and reduces the cost of transacting.  It will also help us partner with local fintechs and payment companies to build solutions on the AfriGO scheme that solve customers’ pain points.”

According to Premier Oiwoh, the MD/CEO of NIBSS, “The payments landscape in Nigeria has continued to evolve via seamless and convenient real-time electronic payment solutions driven by innovation and advancement in technology.

“The launch of our national domestic card scheme AfriGO is very timely; AfriGO will drive our financial inclusion goals amongst many benefits, and we are thrilled that Access Bank is the first bank in Nigeria to issue AfriGO cards to its customers.

“Access Bank has demonstrated the much-needed commitment to enhancing financial inclusion, and we urge other financial institutions to commence issuing AfriGO for more accessible and convenient payments for all Nigerians, regardless of their location or financial status.”

On her part, the Executive Director for NIBSS, Ms Aminu Maida, added, “With technological advancements, there are more options for payments, and the recently launched national domestic card scheme, AfriGO, gives us assured comfort on all financial transactions. We are excited that Access Bank is the first to key into our belief of AfriGO’s immense value to the Nigerian financial ecosystem.

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