Fitch Upgrades Fidelity Bank Outlook to Positive, Affirms ‘B-‘ Rating

Date:

Fitch Ratings has revised the outlook for Fidelity Bank Plc’s Long-Term Issuer Default Rating (IDR) to positive from stable, while maintaining the rating at ‘B-‘. The agency has also affirmed the bank’s National Long-Term Rating at ‘A(nga)’ with a stable outlook.

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In a statement on Friday, Fitch explained that the outlook revision reflects its expectation of strengthened capitalisation for Fidelity Bank in the near term, driven by core capital issuances. These issuances aim to meet the new paid-in capital requirement of N500 billion for banks with international licenses by the end of the first quarter of 2026.

Fitch stated, “Fidelity’s IDRs are driven by its standalone creditworthiness, as indicated by its Viability Rating (VR) of ‘b-‘. The VR considers the bank’s concentration of operations within Nigeria’s challenging environment, high credit concentration, and significant Stage 2 loans, against its growing franchise, sound profitability metrics, solid capital buffers, and reasonable foreign-currency liquidity coverage.”

Fidelity’s National Ratings, also based on its standalone creditworthiness, balance a growing franchise and good capital buffers against profitability that is weaker than that of higher-rated peers, according to the statement.

The rating agency noted that Fidelity is Nigeria’s sixth-largest bank, holding 5 percent of domestic banking system assets at the end of 2023. Strong balance-sheet growth in recent years has increased the bank’s market share, and Fitch expects this trend to continue, although it will remain below that of the five largest banking groups.

Regarding potential negative rating actions or downgrades, Fitch mentioned that a sovereign downgrade could lead to a downgrade of Fidelity’s VR and Long-Term IDR. This would occur if Fitch believes that the effects of a sovereign default could significantly impact the bank’s capitalisation and foreign-currency liquidity, thereby undermining its viability. However, this scenario is deemed unlikely given the positive outlook on Nigeria’s Long-Term IDRs.

Godwin Okafor, The Naija247news
Godwin Okafor, The Naija247newshttps://naija247news.com
Godwin Okafor is a veteran Financial Journalist, Internet Social Entrepreneur, and the visionary Founder of Naija247news Media Limited. With an extensive career spanning over 16 years in financial journalism, Godwin possesses a wealth of experience that seamlessly bridges both traditional and digital media landscapes. His journey in journalism commenced at Business Day, Nigeria, where he laid the foundation for his prolific career. In 2010, Godwin took a bold step by founding Naija247news Media, a platform that has since become a prominent player in delivering timely and accurate news. Educationally, Godwin Okafor holds a Bachelor's degree in Industrial Relations and Personnel Management from the prestigious Lagos State University, Ojo, Lagos. His commitment to continuous learning led him to the Lagos Business School, where he further honed his skills. Additionally, he is recognized as a Fellow of the University of Pennsylvania, having successfully completed the Wharton Seminar for Business Journalists. Throughout his illustrious career, Godwin has earned acclaim by winning numerous journalism awards, a testament to his dedication to excellence in reporting. Beyond his role as a Financial Journalist, Godwin Okafor wears the hat of the Chairman at Emmerich Resources Limited, the publishing entity behind Naija247news. His visionary leadership has played a pivotal role in shaping the media landscape and establishing Naija247news as a trusted source of information. Godwin Okafor's multifaceted expertise, commitment to journalistic integrity, and leadership in the realm of business journalism underscore his influential presence in both the media and entrepreneurial spheres.

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