Lagos, June 10, 2024 – Fitch Ratings has revised the outlook on Fidelity Bank’s Long Term Issuer Default Rating (IDR) to Positive from Stable, while affirming the rating at ‘B-‘.
The credit rating agency has also affirmed Fidelity Bank’s National Long-Term Rating at ‘A(nga)’ with a Stable Outlook.
In a statement released on Friday, Fitch said that the outlook revision reflects its “expectations that the bank’s capitalisation will strengthen in the near term as a result of core capital issuances, including to meet the new paid-in capital requirement and reasonable foreign-currency (FC) liquidity coverage.
“Fidelity’s National Ratings are driven by its standalone creditworthiness. They balance a growing franchise and good capital buffers against weaker profitability than higher rated peers.”
The rating agency said that Fidelity is Nigeria’s sixth-largest bank, as it accounted for 5% of domestic banking system assets at end-2023, adding that strong balance-sheet growth in recent years has increased bank’s market shares and that it expects these to increase further but remain below those of the five largest banking groups.
On factors that could lead to negative rating action/downgrade, the agency said: “A sovereign downgrade could result in a downgrade of Fidelity’s VR and Long-Term IDR if Fitch believes that the direct and indirect effects of a sovereign default would be likely to have a sufficiently large effect on capitalisation and foreign-currency liquidity to undermine the bank’s viability.
“However, this is unlikely considering the Positive Outlook on Nigeria’s Long-Term IDRs.” (GBN)
