Moody’s Periodic Review of Ratings say BOI’s B2 CFR constrained by NPLs, CoPs

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Nigeria’s Bank of Industry’s B2 CFR is effectively constrained at the level of country’s sovereign rating, primarily because of the high interlinks between its credit profile and that of the government, Moody’s Investors Service reveals.

According to the report, the CFR also reflect its robust capital buffers and moderate level of nonperforming loans (NPLs), but also the tough operating conditions that will pressure its financial performance. Its funding base benefits from long-term market funding and funding from the Central Bank of Nigeria, but remains narrow and vulnerable to investors’ risk appetite, while there are also significant funding maturities by June 2021

Moody’s Investors Service (“Moody’s”) has completed a periodic review of the ratings of Bank of Industry and other ratings that are associated with the same analytical unit.

The review was conducted through a portfolio review in which Moody’s reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers.

The review did not involve a rating committee. Since 1 January 2019, Moody’s practice has been to issue a press release following each periodic review to announce its completion.

This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement.

Key rating considerations are summarized below

Bank of Industry’s B2 corporate family rating (CFR) is driven by the entity’s b2 Baseline Credit Assessment (BCA). Its B2 issuer rating is based on the B2 CFR and the application of our Loss Given Default (LGD) analysis for speculative-grade companies.

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