May 20, 2022

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FITCH RATING PUT ECOBANK IDI AT ‘B’ OUTLOOK

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FITCH RATING PUT ECOBANK IDI AT ‘B’ OUTLOOK



The Fitch Rating company London has affirmed Togo-based Ecobank Transnational Incorporated’s (ETI) Long term Rating Isuer Default Rating IDI at ‘B’. With a stable Outlook. The summary of the rating shows

Long-Term IDR: affirmed at ‘B’; Stable Outlook
Short-Term IDR: affirmed at ‘B’
Viability Rating: affirmed at ‘b’
Support Rating: affirmed at ‘5’
Support Rating Floor: affirmed at ‘No Floor’

The Long-Term IDR, Short-Term IDR and Viability Rating is based on operating environment, company’s profile, assets quality, capacity to generate earnings, capital profile and funding profile. Fitch rating considered these factors as stable based on the diversification benefit from investment and operating in a range of different economies. However, it’s operations in sub-Sahara Africa, especially the current economic conditions in Nigeria may affects it’s rating.

According to Fitch, the Operating environment of ETI as a leading Pan-African banking group has high influence on the Bank’s Viability Rating (VR). But, the operating environment in Nigeria may pose a challenge. Fitch, also stated that the company profile is solid but is constrained by the environment the group operates in.

The Support Rating and Support Rating Floor are expected to be upgraded and revised upwards, as we believe, says Fitch, it is highly unlikely that the Nigerian authorities would provide support to the group beyond the Nigerian operations. Also, Nedbank and Qatar National Bank (QNB) are long-term and strategic investors in ETI. However, as stated by Fitch, ”their current stakes in the group and the limited integration of operations currently mean that institutional support cannot be relied upon. As a result,  institutional support is not factored into the ratings.”

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