Foremost international rating group for financial institution, Moody’s Investors Service, (“Moody’s”) has assigned Aa1.ng/NG-1 national scale local and foreign currency issuer ratings to the Bank of Industry (BOI). These latest ratings, the bank said were underpinned by a standalone credit assessment of b2 and one notch of government support uplift, which results in a global scale long-term issuer rating of B1.
Speaking against the backdrop of the latest rating, BoI Acting Managing Director, Mr. Waheed Olagunju said that they confirmed the bank’s similar ratings of AA+ by Fitch Ratings and A+ by Agusto & Co. He attributed the institution’s consistent high ratings to strong commitment to professionalism and strict adherence to global best practices by the bank’s competent management and staff. According to Olagunju, “The bank’s remarkable performances in Q1,Q2 and Q3 of 2016 were indications that BOI was on course to sustaining its remarkable operations and ending the outgoing year on a strong note despite the economic head winds.”
He cited the reduction in the ratio of non-performing loans to 3.84% as at 30th September 2016 from 3.87% as at 30th June 2016 as one of the indications of the high flying status of the development financial institution. The Aa1.ng rating is the second highest of three national scale ratings (NSR) categories corresponding to BOI’s global scale ratings (GSR). According to Moody’s, BOI’s national scale ratings capture the bank’s robust capital buffers, with an equity to assets ratio of 30% as of Dec 2015; stable liability structure made up of long-term funding at concessional rates; and tangible improvements to governance and risk positioning in recent years.
It added that these strengths are balanced against its projection that asset quality will be increasingly pressured given the loan growth strategy that the bank is pursuing, particularly in the micro, small and medium-sized enterprises (MSMEs) segment, which may expose the bank to riskier assets. Last year Moody’s assigned BOI Ba3, which, according to the bank, was in consonance with Nigeria’s sovereign rating.
