According to the rating agency, FBNH’s earning capacity remains sound, underpinned by below-sector-average funding costs, highlighting the group’s solid competitive position.
Fitch in the ratings just released, stated that the “B-” rating primarily reflects corporate governance weaknesses highlighted by the Central Bank of Nigeria in April 2021, pertaining to long-standing and problematic related-party exposures at FBNH. “We understand that these issues have not yet fully been resolved by FBNH, which creates uncertainty surrounding further remedial actions that CBN may impose and puts pressure on the ratings. In light of the latter, and given FBNH’s Limited headroom above minimum capital requirements and thin capital buffer to absorb potential shocks, its weak capitalisation also drives the negative outlook.”
While noting that the holding company’s impaired loan ratio had further improved from 28 per cent as at end of 2018 financial year to 7.6 per cent as at the end of the first half of 2021, Fitch said “loan quality remains a weakness compared with peers, although net loans were a low 32 per cent of assets at end-1H21.
“However, as a result of the write-offs, coverage of impaired loans by loan loss allowances fell to 47 per cent , one of the lowest levels among peers.
Nigeria Latest News, Nigeria Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: LeadershipNGA - 🏆 4. / 77 Read more »
Source: SaharaReporters - 🏆 9. / 63 Read more »
Source: PremiumTimesng - 🏆 3. / 78 Read more »
Source: Daily Trust - 🏆 13. / 51 Read more »
Source: LeadershipNGA - 🏆 4. / 77 Read more »
sme.ngAccess Bank Partners To Support Digitalisation Of Women Businesses
Source: LeadershipNGA - 🏆 4. / 77 Read more »