Tag: rating

  • LBS consolidates on global rating

    The Lagos Business School (LBS) has consolidated on its recent rating by the Financial Times of London as one of the leading global business school, by adding two seasoned experts to its faculty base: Dr. Oghenovo Obrimah and Marvel Ogah.

    Dr Obrimah joins the Accounting, Finance and Economics department. Obrimah holds a Ph.D. in Business & Management, with a concentration in Finance and sub-specialisation in Economics from the RH Smith School of Business of the University of Maryland, College Park US. He graduated with First Class Honors in Mathematics from the University of Ibadan, Nigeria in 1995. He was awarded a Pre-doctoral Fellowship in Economics at Yale University from 1999 to 2000, and has worked with PricewaterhouseCoopers LLC and First City Merchant Bank PLC.

  • Moody’s affirms Sterling Bank’s B2 rating

    Moody’s affirms Sterling Bank’s B2 rating

    An international rating agency, Moody’s, has assigned a B2, stable rating to Sterling Bank Plc for its resilient deposit funding base and stable local currency liquidity.

    The rating was also informed by the bank’s improvement on its Information Technology (IT) infrastructure and risk management processes.

    The rating agency has also assigned a national scale local currency deposit rating of A1.ng/NG-1 and a Counterparty Risk Assessment (CRA) of B1.

    It noted that Sterling Bank’s strength is balanced against Nigeria’s challenging operating environment, which takes into account the strong growth potential of the system, institutional and structural weaknesses and low foreign currency liquidity buffers.

    Others are the vulnerabilities in asset quality on account of high single-name and sector concentration risks and modest capital levels, especially in the light of the bank’s high oil and gas and foreign currency loans exposure.

    Sterling is a domestic bank with a market share of total assets of around 2.6 per cent (N834.2 billion, $2.6 billion, FY2016) with a national commercial banking licence.

    Its banking services emphasises on consumer/retail banking, trade services, commercial and corporate banking activities.

    The bank operates through 180 branches in Nigeria, with over 800 ATMs and was established in 2006 following the merger of NAL Bank, Indo-Nigeria, Magnum Trust Bank, NBM and Trust Bank of Africa.

    The rating agency remarked that all long-term ratings assigned to Sterling carry a stable outlook, reflecting its expectation that the bank’s deteriorating asset quality and profitability metrics will likely stabilise in the next 12-18 months.

    Moody’s Investors Service, often referred to as Moody’s, is the bond credit rating business of Moody’s Corporation, representing the company’s traditional line of business and its historical name. Moody’s Investors Service provides international financial research on bonds issued by commercial and government entities and, with Standard & Poor’s and Fitch Group, is considered one of the big three credit rating agencies in the world.

    These include government, municipal and corporate bonds; managed investments such as money market funds, fixed-income funds and hedge funds; financial institutions, including banks and non-bank finance companies; and asset classes in structured finance.

    In Moody’s Investors Service’s ratings system, securities are assigned a rating from Aaa to C, with Aaa as the highest quality and C the lowest quality.

    Moody’s was founded by John Moody in 1909 to produce manuals of statistics related to stocks and bonds and bond ratings.

    Sterling Bank recently emerged as one of the best banks in Nigeria in international trade cash payment from Deutsche Bank AG of Germany.

    The bank emerged second runner-up in the 6th edition of the Straight Through Processing (STP) Excellence Award 2016/2017 Dinner in Lagos.

    Mr. Harold Leenen, managing director, GTB Head Middle East & Africa of Deutsche Bank presented the award to Mr. Yemi Odubiyi, executive director, Operations & Services and Mr. Ayodele Ogumeru, group head, Trade Services, both of Sterling Bank.

  • Fitch affirms BoI’s sovereign rating

    Fitch Ratings has affirmed the national rating of the Bank of Industry (BoI) as well as seven other banks.

    According to Fitch, the rating actions followed its downgrade of Nigeria’s Long-Term Local Currency Issuer Default Rating (IDR) to ‘B+’ from ‘BB-’, as a result of which it is now equalised with the Long-Term Foreign Currency IDR.

    A statement from Fitch explained that the new rating was driven by change in Fitch’s sovereign rating criteria. “Following the sovereign criteria change and rating action, Fitch has recalibrated the national rating scale for Nigeria. As a result the national ratings for these banks are affirmed as there is no change in their relative creditworthiness.

    “The national ratings of BOI are driven by potential sovereign support reflecting its 99.9 per cent state ownership, its policy role and the bank’s strategic importance to Nigeria’s economic and industrial development”, the statement read.

    BoI however, maintained that it remains very virile and better repositioned to push the frontier of the nation’s industrial sector through aggressive business financing.

  • GCR affirms Sterling Bank’s BBB rating

    GCR affirms Sterling Bank’s BBB rating

    An international rating agency,  Global Credit Ratings (GCR),  at the weekend affirmed Sterling Bank’s national long-term and short- term ratings of BBB(NG) and A3(NG) respectively, with the outlook accorded as stable.

    The rating which is valid until July 2017 comes after another global ratings agency, Moody’s Investors Service, affirmed the bank’s local and foreign currency issuer ratings of B2 with stable outlook.

    Moody’s had described Sterling Bank as a stable financial institution with solid asset quality, robust Information Technology and risk management processes, and high liquidity buffers. The Agency also assigned a Counterparty Risk Assessment (CRA) of B1(cr)/Not Prime(cr) to the Bank with stable outlook.

    It attributed the rating to the bank’s strong performance and resilience amidst challenging operating conditions.

    It said: “Sterling’s total assets amounted to N796.4 billion (representing a market share of 2.8 per cent) at FYE15. The bank’s capital base grew 12.2 per cent in FYE15, solely through internal capital generation, with the risk weighted capital adequacy ratio (“RWCAR”) improving to 17.5 per cent at FYE15 (FYE14: 14.0 per cent).

    To further strengthen its capital base and support asset growth, the bank is in the process of raising up to N35 billion Tier II capital expected to be concluded in the third quarter of FYE 16″.

    Notwithstanding the 100 basis points contraction recorded in net interest margin, Sterling Bank, according to the Agency, reported a net profit after tax (“NPAT”) of N10.3billion for FYE15, representing an improvement of 14.4 per cent in the 2014 operating year.

    “Performance was supported by non-interest income which grew 13.8 per cent to N29.3billion (buoyed by growth in trading securities). Further, total operating expense line declined 1.9 per cent to N49.7billion, resulting in a reduction of the cost ratio to 72.2 per cent from 73.6 per cent in the full year ending December 31, 2014.”

    According to the Agency, the Bank’s gross Non Performing Loan (NPL) ratio ended at 4.8 per cent in 2015, which was below peer average of 6.1 per cent and regulatory limit of five per cent.

  • Bol gets Ba3 international issuer rating, stable outlook

    Bol gets Ba3 international issuer rating, stable outlook

    Moody’s Investors Service has assigned first-time ratings of Ba3 to the Bank of Industry (BoI), while affirming the development finance institution’s rating as stable.

    According to Moody’s, the ratings are underpinned by a b2 standalone credit profile and two notches of uplift due to Moody’s government support assumptions.

    The rating agency explained that Bank of Industry’s b2 standalone profile reflects its robust capital buffers, with equity to assets ratio of 30 per cent as of September 2015; a stable liability structure made up of long-term funding at concessional rates; and the tangible improvements to the bank’s governance and risk positioning in recent years.

    In its Global Credit Research report, Moody’s noted that the Bank of Industry’s reported nonperforming loans ratio (NPLs) is relatively low at 4.6 per cent as of November, last year and compares favourably to development bank peers globally.

    “Low NPLs are partly explained by the exposures relating to the CBN intervention fund, which are guaranteed by commercial banks and, as such, have generated close to zero NPLs as Bank of Industry exercises the guarantee immediately after any of these loans become delinquent.

    “That said, the ratings currently assigned to Bank of Industry take into account our expectation of a higher NPL level (between five and 10 per cent of total loans) over the next two years, as we expect asset quality to come under pressure as the bank increases its loan exposure within Nigeria’s challenging operating environment.

    “Bank of Industry plans to double its total loan book size over the next four years and to increase its MSME portfolio by 14 times its currently modest size. This MSME target corresponds to an annual growth rate of 93 per cent, albeit from a very low base (four per cent of total portfolio). Bank of Industry projects that about half of new loans that will be extended in the future will be guaranteed by a commercial bank”, it added.

    Commenting on the bank’s credit profile, Moody’s stated that as of September 2015, tangible common equity as a percentage of total assets stood at 30 per cent, up from 26 per cent in 2014, which is substantially stronger than similarly-rated global peers.

    “Although we expect Bank of Industry’s capitalization to decline going forward due to its planned loan book growth of about 20 per cent annually, we anticipate that tangible common equity as a percentage of total assets will remain above 20 per cent for the next 12 to 18 months, which will still leave the bank with a robust capital cushion that compares favourably to peers internationally.

  • Fitch cuts MTN’s credit rating

    MTN Group Ltd.’s credit rating was cut one level by Fitch Ratings Ltd. because of the increased risk that Africa’s largest phone company faces in its two biggest markets, Nigeria and South Africa.

    The rating was cut to BBB-, Fitch Ratings said in a statement on Thursday. The outlook was raised to stable from negative.

    In Nigeria, Africa’s largest economy, the telecommunications regulator has fined MTN $3.9 billion for failing to switch off unregistered mobile-phone customers, which was revised down from an original penalty of $5.2 billion. South Africa’s credit rating was cut by Fitch last week because of a worsening growth outlook that threatens fiscal credibility.

    ”These changes result in increased credit risk to MTN given its reliance on emerging markets and its exposure to South Africa and Nigeria, in particular,” Damien Chew, an analyst at Fitch, said in the statement. “An upgrade is unlikely in the short term due to MTN’s significant exposure to countries with high political and regulatory risk.”

  • Rating OAU’s rating

    What Nigeria is hobbled on all fronts is a reality enormously supported by the existential woes of a disproportionate majority of its inhabitants. The country’s key institutions are effectively dysfunctional where they are not totally moribund. It is the reason behind its continual starkly horrible position among the columns of countries with uninspiring records on good governance and human development initiatives. Whether it is the Ibrahim Index on African Governance of  September 2014 which rated Nigeria as an eminent member of the group of the worst governed countries in Africa, or the UNDP Human Development Report of the same year which ranked the country low on all vital markers of development, the bald fact is that the most populous black nation on earth is very much in the woods of myopic leadership, wanton corruption, institutional anomie, pervasive lawlessness, unsustainable economic policies, and avoidable crippling youth unemployment.

    The knowledge factories of the country are not without their tell-tale signs of persistent decay and progressive decline in quality along the three legs on which they are propped, namely research, teaching, and community service. Nigeria’s higher institutions of learning regularly fare well in operating at a distance from the culture of excellence that defines other lighthouses of knowledge in other places, beginning from a few countries like Ghana and South Africa on the African continent. Having lost the light in their houses owing to a number of avoidable factors, it is hardly any surprise that the products of our higher institutions of learning are everything but round and sound. It is even of no surprise that parents who can afford it now prefer to dispatch their wards, posthaste, to other countries whose educational systems are firmly rooted in the earth of high standard and quality performance.

    But even when it appears some of our higher public educational institutions are casting off the burdening bog of lacklustre performance in the execution of their objectives, there is always some totally preventable disappointing reality that often stands out like a sore thumb. In the shining armour of a few federal universities in Nigeria inching towards a resurgence of the best tradition of a university, there is always a depressing chink.

    It is against the foregoing backdrop that one views the recent ranking of Obafemi Awolowo University (OAU) as the best higher institution of learning in Nigeria. According to reports in some national dailies and online news portals, an international institute which concerns itself with ranking universities across the world, Cybermetrics Lab of Spain, considered OAU as the primus inter pares for the fifth unbroken time, with the universities of Lagos and Ilorin trailing behind in the second and third positions respectively. The research organisation, which is owned by the Consejo Superior de Investigaciones Cientificas, based its assessment on such areas as the curricular, research, academic and general administration of the university.

    Ordinarily this should delight the heart, considering the fact that the indices which the international research group considered in reaching its conclusion in the ranking of OAU as the best are critical to the continuous relevance of any university that is not a knowledge factory in name and structures mainly. Research, needless to stress, is the lifeblood of any higher institution of learning. It is the long-winding, circuitous, interminable path to the treasure troves of knowledge that can help to scale down mountainous socio-economic problems. The same is true of teaching, curricular design and administration. Where those are sensibly handled and intelligently coordinated, the entire country will be the better for it.

    While I agree that OAU in research outputs, and to a certain degree in its curriculums in some programmes, is showing more than a promise to connect fittingly with the culture of best practices in the real academic world, I should like to observe that some chinks abound in the magnificent armour of the university in the areas of teaching and general administration. I have robust interactions with a few students of the university across some departments. They regale me with horrid tales of how comfortable some of their lecturers are with boycotting lectures or habitually turning up late for lectures. The ones who barely show up and those who stroll in thirty minutes late for a lecture of one hour all have something in common – arrogant silence. They often consider it below them to explain their inexcusable absences or justify their half-hour appearances. I have been told repeatedly about some of the female lecturers in the Faculty of Education giving such reprehensible excuses like going to the salon for their hairdos. Also, lecturers gladly ignore their lectures all in the name of going to pick their children in schools.

    There are other lecturers who consider it a transgression for their students to raise questions on their ‘lectures’. They frown gravely at the whole idea of being questioned on certain points, a development which astoundingly negates a core essence of a university. Nevertheless, a disproportionately high number of students continue to return positive assessments of these misbehaving lecturers whenever they are to attend to the lecturer assessment sheet designed by the university. Students betray their consciences to do that because they have been threatened by their lecturers and so fear the backlash of poor grade or delay in graduation. While there are diligent, disciplined and dedicated lecturers with enviable work ethics in OAU, I fear to report that those completely opposite at various levels are gaining wider space.

    Rather than dismiss these claims, the school management would do well to investigate them. They will not sweat much before they discover those mortifying practices. The organisation which rates the school in that cheering manner may be unaware of the trouble with teaching and the attitude of lecturers to teaching in OAU, but the top echelons of the school must never enjoy the self-deception encouraged by the tide of the positive rating. They must avoid the false comfort that such rating is likely to inspire, considering the subsisting dent in the area of teaching. Enviable research culture and good curriculums will not take care of the culture of teaching, just as shoddy attitudes of lecturers cannot help in grooming the round and sound students who can give good account of themselves anywhere.

    Moreover, there are equally appalling tales to tell in the area of general administration. Many of the non-teaching staff of OAU can be terrible when it comes to doing their jobs. They are mostly incompetent, unfriendly, and slothful. Even the school management can be very disappointing and draconian in their management of crises. Their recent response to the actions of the Non-Academic Staff Union of the university further revealed management inadequacy. Even issues concerning student welfare, protests, and demands are too often managed ineptly, thus affirming the view that Nigerian university mangers need more than a crash course in human and material management.

    OAU may have added another feather to its small cap; but its top officials must note that rather than mafficking, they need to rise stoutly to check the menacing tide which seeks to totally erode the quality and substance of teaching and general administration under their watchful eyes. Otherwise, Africa’s most beautiful campus risks becoming the white, outwardly glittering but inwardly rotten sepulchre the Nazarene talks about in his parable.

     

    • Adediran wrote in from Enuwa, Ile-Ife, Osun State.
  • Jonathan’s rating has improved with power supply, says Presidency

    Jonathan’s rating has improved with power supply, says Presidency

    The Presidency has acknowledged “improvement” in power generation and distribution in certain parts of the country, as stated in the NOI opinion poll on President Goodluck Jonathan’s rating for July.

    Quoting the NOI report, the Presidency said 53 per cent of Nigerians sampled in the poll expressed satisfaction with Jonathan’s performance in the power sector.

    A statement yesterday by the Senior Special Assistant to the President on Public Affairs, Dr. Doyin Okupe, cited respondents from the Northcentral, Northeast, Southeast and Southsouth geo-political zones. They said they have experienced “varying degrees of improvement” in the power supply compared to what obtained in the previous months.

    “While we acknowledge the positive indicators in the NOI’s survey with regards to the approval rating of Mr. President’s performance by the majority of Nigerians, we wish to assure that the President will not rest on his oars regarding the promise he made to Nigerians on the provision of uninterrupted power supply as a key component of the transformation agenda.

    “The present power improvement noticed and acknowledged in some parts of the country is due partly to the measures put in place by the government to reduce points of leakages and transmission failure as well as improve transmission capacity of power infrastructure.”