Fitch Ratings has affirmed that the recent First Bank of Nigeria (FBN) and First Bank of Nigeria Holdings (FBNH) board replacement will not affect the bank’s profitability and asset quality as it rates the bank at B- with a negative outlook.
In a statement at the weekend, the rating firm noted that the Central Bank of Nigeria (CBN) remedial actions will not have a material effect on the group’s asset quality, profitability and capitalization.
“We have assessed the near-term financial impact of these actions on FBNH and FBN and believe this is tolerable at the rating level, even though the final outcome is uncertain.
“In our view, any remedial actions imposed by the CBN, including a potential reclassification of related-party exposures as impaired, will not have a material effect on the group’s asset quality, profitability and capitalization.
“However, this does not consider any possible additional actions by the CBN, especially if FBN fails to implement the regulator’s corrective measures or if there were any further uncovering of corporate governance irregularities.”
It also said the outlook remains negative, reflecting FBNH’s pre-existing asset quality and capitalization weaknesses as well as the group’s corporate governance weaknesses highlighted by the CBN. These could put pressure on the ratings.
CBN on April 29, 2021, replaced the board of FBNH and FBN over the unjustified and unapproved change of the bank’s MD/CEO by the former board, corporate governance failings, among others.
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