Global credit ratings and research agency, Fitch Ratings has reaffirmed one of Nigeria’s leading banks, Diamond Bank, strong fundamentals
Fitch, in the recently released 2016 Ratings Review of Nigerian Banks, Fitch affirmed a ‘B’ Rating, with Stable Outlook for Diamond Bank’s Short-term and Long-term Foreign Currency Issuer Default Ratings (IDR).
The bank’s national long-term rating was also affirmed at ‘BBB+ (nga)’; while the national short-term rating was affirmed at ‘F2 (nga)’. Viability rating was affirmed at ‘b’; support rating affirmed at ‘4’; support rating floor: affirmed at ‘B’; while the senior unsecured notes rating was affirmed at ‘B’/’RR4′.
The ‘B’ IDR rating indicates that Diamond Bank has the capacity to meet financial commitments, subject to the country’s business and economic environment; while the ‘BBB+ (nga)’ national ratings denote a “moderate default risk relative to other issuers or obligations in the same country.”
Further, the ‘F2 (nga)’ national short-term rating “indicates a good capacity for timely payment of financial commitments relative to other issuers or obligations in the same country.”
These ratings were premised partly on Fitch’s downgrade of Nigeria’s sovereign ratings (to ‘B+’) on 23 June 2016, in addition to the bank’s strong capital, operational and liquidity positions.
Reacting to the report, the Bank’s spokesperson, Ayona Trimnell said: “These ratings affirmed the precision of our corporate strategy in deploying new technologies and digital applications to drive financial inclusion, convenient banking, enhanced customer friendly services and our overall retail banking approach.”
Fitch noted that the strong regulatory capital ratios of the Bank have helped offset the one-off impact from the devaluation arising from Nigeria’s new foreign exchange regime. Nevertheless, the buffer between Nigerian banks’ capital ratios and the regulatory minimum is reducing.
