International rating group for financial institutions, Moody’s recently assigned Aa1.ng/NG-1 national scale local and foreign currency issuer ratings to the Bank of Industry (BoI).
It would be recalled that last year, Moody’s assigned BoI Ba3, which was in consonance with Nigeria’s sovereign rating. These latest ratings are underpinned by a standalone credit assessment of b2 and one notch of government support uplift, which results in a global scale long-term issuer rating of B1.
In his remarks, BoI’s acting managing director and chief executive officer, Waheed Olagunju, stated that they confirmed the bank’s similar ratings of AA+ by Fitch Ratings and A+ by Agusto & Co.
In an interview, he linked the institution’s consistent high ratings to strong commitment to professionalism and strict adherence to global best practices.
Elated Olagunju revealed that BoI’s remarkable performances in Q1,Q2 and Q3 of 2016 were indications that BoI was on course to sustain its remarkable operations and to end the outgoing year on a strong note despite the economic head winds. In this regard, he cited the reduction in the ratio of non-performing loans to 3.84 per cent as at September 30, 2016 from 3.87 per cent as at June 30, 2016. The rating group also classified seven Nigerian banks as highly liquid and strong now.Experts say the Aa1.ng rating is the second highest of three national scale ratings (NSR) categories corresponding to BOI’s global scale ratings (GSR).
But in the wisdom of Moody’s, “BoI’s national scale ratings capture the bank’s robust capital buffers, with an equity to assets ratio of 30 per cent as of December 2015; stable liability structure made up of long-term funding at concessional rates; and tangible improvements to governance and risk positioning in recent years”.
Moody’s noted that these strengths are balanced against its projection that asset quality will be increasingly pressured given the loan growth strategy that the bank is pursuing, particularly in the micro, small and medium-sized enterprises (MSMEs) segment, which may expose the bank to riskier assets.
