Fitch Ratings Affirms Wema Bank’s BB-, Stable Outlook

 

Fitch Ratings, a global leader in credit ratings and research, has affirmed Wema Bank’s Viability Rating (VR), saying it has a stable outlook.

The agency also affirmed the Long-term National Rating (Wema) at (BBB-) to reflect the improvement in creditworthiness over time relative to the best credits in Nigeria.

In Fitch’s opinion, the banking industry will remain challenging considering volatile and low oil prices, continued disruptions in oil production and constraints regarding the forex liquidity.

As such, the industry could witness a rise in non-performing loan ratios, though strong capital ratios helped absorb the one-off negative fore shock. It said, the forex devaluation could impact consumer demand.

It said the Long-term Issuer Default Ratings (IDR) of Wema remains on stable outlook as the rating is driven by its Viability Ratings (VR) and there is no expectation of any material change in the bank’s intrinsic creditworthiness.

Wema Bank’s strengths, which underpin its long- and short-term ratings, include its strong risk management culture, low NPL exposure and good liquidity levels. The bank’s affirmed rating further reinforces its resolve to remain a smarter and efficient bank.

Wema Bank Plc’s Managing Director, Segun Oloketuyi, said the rating is an affirmation of the bank’s transformation and its positioning as one of the major players within the  retail banking landscape.

Fitch also affirmed the Viability Ratings (VR) of all the Nigerians banks, Fitch has revised the SRFs to ‘B’ from ‘B+’ for the systemically important banks; FirstBank, UBA, Zenith and GTBank, following the downgrade of Nigeria’s sovereign ratings.

The challenging and volatile operating environment in Nigeria and other key rating factors, particularly the banks’ financial profiles, constrain the VRs in the highly speculative ‘b’ range. Despite slower asset growth and higher loan impairment charges, Fitch expects banks to remain profitable in the year due to still strong earnings generation and as such all banks’ national ratings have been affirmed given their unchanged respective creditworthiness relative to each other.