{"id":73605,"date":"2023-07-05T15:00:14","date_gmt":"2023-07-05T14:00:14","guid":{"rendered":"https:\/\/nationalwire.com.ng\/?p=73605"},"modified":"2023-07-05T15:02:42","modified_gmt":"2023-07-05T14:02:42","slug":"fitch-foresees-upgrade-of-ecobanks-national-ratings-as-exchange-rate-volatility-recede","status":"publish","type":"post","link":"https:\/\/nationalwire.com.ng\/sub\/fitch-foresees-upgrade-of-ecobanks-national-ratings-as-exchange-rate-volatility-recede\/","title":{"rendered":"Fitch Foresees Upgrade Of Ecobank\u2019s National Ratings As Exchange-Rate Volatility Recede"},"content":{"rendered":"
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Fitch Ratings says it foresees an upgrade of ENG’s National Ratings which would result from strengthening its creditworthiness relative to other Nigerian issuers.<\/p>\n

According to the international rating agency, it expects to resolve the Rating Watch Negative (RWN) of ENG \u201cwithin the next six months when exchange-rate volatility may recede, the impact on regulatory capital ratios and common equity double leverage is clear, and the scale of the second-order economic effects of the devaluation on loan quality becomes evident\u201d.<\/p>\n

Fitch in its recent report noted that\u00a0Factors that Could, Individually or Collectively, Lead to Positive Rating Action and Upgrade include ENG’s continued compliance with its minimum CAR requirement following the devaluation, with sufficient buffers to accommodate increase in credit concentration and loan-quality risks. It noted that an upgrade of ENG’s VR and Long-Term IDR would require a sovereign upgrade and an improvement in operating conditions in conjunction with a strengthened financial profile.<\/p>\n

Fitch Ratings had placed Ecobank Transnational Incorporated\u2019s (ETI) and Ecobank Nigeria Limited\u2019s (ENG) Viability Ratings (VRs) of \u2018b-\u2018 and Long-Term Issuer Default Ratings (IDRs) of \u2018B-\u2018 on Rating Watch Negative (RWN) following the sharp devaluation of the Nigerian naira.<\/p>

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Fitch in a statement\u00a0indicated that\u00a0the current RWN reflects the risk of ENG breaching its\u00a0 minimum capital requirements due to the direct effect of the devaluation.<\/p>\n

\u201cFor ENG,\u00a0it also reflects increased risks to capital from large foreign-currency (FC) problem loans (Stage 2 and Stage 3 under IFRS 9) that have been inflated by devaluation, which may necessitate greater prudential provisions and exert further pressure on the bank\u2019s total capital adequacy ratio (CAR), in addition to broader loan quality risks stemming from the devaluation.<\/p>\n

Fitch expects to resolve the RWN within the next six months when exchange-rate volatility may recede, the impact on regulatory capital ratios and common equity double leverage is clear, and the scale of the second-order economic effects of the devaluation on loan quality becomes evident.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/p>","protected":false},"excerpt":{"rendered":"

Fitch Ratings says it foresees an upgrade of ENG’s National Ratings which would result from strengthening its creditworthiness relative to other Nigerian issuers.<\/p>\n","protected":false},"author":6,"featured_media":62987,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[23,17],"tags":[1663],"coauthors":[2391],"class_list":["post-73605","post","type-post","status-publish","format-standard","has-post-thumbnail","","category-business","category-news","tag-fitch"],"yoast_head":"\nFitch Foresees Upgrade Of Ecobank\u2019s National Ratings As Exchange-Rate Volatility Recede - National Wire<\/title>\n<meta name=\"description\" content=\"Fitch Ratings says it foresees an upgrade of ENG's National Ratings which would result from strengthening its creditworthiness relative\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/nationalwire.com.ng\/sub\/fitch-foresees-upgrade-of-ecobanks-national-ratings-as-exchange-rate-volatility-recede\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Fitch Foresees Upgrade Of Ecobank\u2019s National Ratings As Exchange-Rate Volatility Recede - 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