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Fitch Downgrades First Bank Credit Rating
November 23, 2009 14:03, 677 views
Fitch Ratings downgraded the individual credit rating of First Bank of Nigeria Plc., the country’s largest company by market value to ‘D/E’ from ‘D’, reflecting “a significant deterioration in asset quality” and “increasing levels of concentrated debt risk.”
Fitch affirmed First Bank’s long-term issuer default rating of ‘B+’, with the outlook on this rating remaining “stable.”
The new rating followed the bank’s declaration of a profit slump in its first half-year result, ending 30 September.
The bank saw gross profit dropping from N30 billion in 2008 to N3.2 billion. Profit after tax dropped to N2.2 billion, as it made provision for a bad loan running close to N30 billion. However, the bank’s other indices all pointed northwards, with turnover and capital base all recording double digit increase.
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Arise O Compatroit
23 November 2009 14:20First Bank will get out of it with time even soon. It’s still a well managed bank with a management team that has proven record & integrity.
rufus
23 November 2009 15:44the problem is peculiar to all banks all over the world due to meltdown. I thought First bank was only bank not involved in bad loan not to talk of making provision for bad loan. Stop using some banks to achieve some selfish interest.
Mabel Tonye
23 November 2009 15:54Where is Sanusi? sorry he was an ED and later MD of First Bank!
Baba Eto
23 November 2009 15:57Fitch are very unserious arent they? They were the ones busy giving all the problematic banks in Nigeria B+ ,organizing bogus awards and events….and even rated the collapsed J P Morgan and Merril Lynch BB+.Its only in Nigeria they can shout.
OG Balogun
23 November 2009 16:10Why should a bank hold toxic debts without a concurrent provision? How does it becomes a question of scapegoating by the publisher? In Nigeria,some of banks involved in this practice of “corporate witchcraft” ,have enjoyed patronage of Nigerians who see this exposure by CBN as tribalism ( between north and south) and translated it further,into the religion arena.We a thus,blind folded from seeing the efforts of the CBN to prosecute this potential “Houses of Fraud and iniquities”.
Tell me More
23 November 2009 16:37By the time he finishes with the apex bank, Nigeria will be downgraded to the ranks of Zimbabwe
MAN LAWYA
23 November 2009 19:29IF FIRST BANK IS D/E , HOW WILL THE OTHER BANKS BE RATED ? Y/Z OR Z ?????
Femo
23 November 2009 20:15@Baba eto.u re very correct.fitch is not a serious rating agency even Nigerian GCR is somewhat better.
Shehu Mugu
23 November 2009 21:46See how Sanusi has destroyed Nigerian banks in the name of reform. Who will call this man to order before he destroys the national economy?
rotimi
23 November 2009 22:02Baba Eto , get your facts right. J.P Morgan is not and was never collapsed, they even took over a distressed bank, Bear Stearns. They were on AAA though…… I get you point about Fitch and other rating agencies, but please stay on point.
Musedik
23 November 2009 22:06I don’t know why we are crying on the obvious, First Bank operates in the same environment as the other failed banks; their products are marketing styles are very similar, albeit their corporate governance and reporting may differ from that of the ill banks. First Bank will need to differentiate itself from others, not via ads, or vain communications, but well structured and proven banking strategy, the one that rivals US and UK banking systems, for it to live up to its name…First Bank. Where does this downgrade leaves First Bank with its proposed Bond Issue…especially the coupon, tenor, structure (secured or unsecured)?