Access, 6 other Nigerian banks ratings to be upgraded – Fitch Ratings

Seven Nigerian banks and two bank holding companies may see upgrades. This would happen if Nigeria’s sovereign Long-Term Issuer Default Ratings (LT IDRs) are upgraded. The banks must also maintain stable financial profiles.

Fitch Ratings reports that the Positive Outlooks on these entities match the sovereign's outlook. The banks include Access Bank, Zenith Bank, First HoldCo, First Bank of Nigeria, United Bank for Africa (UBA), Guaranty Trust Holding Company (GTCO), Guaranty Trust Bank (GTB), Fidelity Bank, and Bank of Industry (BOI). Most IDRs are based on standalone creditworthiness shown by Viability Ratings (VRs).

These VRs face constraints due to high exposure to the sovereign. This includes holdings of sovereign debt securities and large cash reserves at the Central Bank of Nigeria.

Fitch notes that Zenith, UBA, and GTCO/GTB have VRs one notch below ‘b’. This is due to operating environment and sovereign rating constraints. These constraints could ease with an upgrade in Nigeria’s LT IDRs. Other banks’ VRs align with their implied VRs.

Fidelity Bank has a smaller franchise than other major banks. However, it has more than doubled its paid-in capital since late Q3 2024 through capital raising efforts. Fidelity is now raising more capital to meet new minimum requirements effective at the end of Q1 2026. Improved core capitalization could lead to an upgrade in Fidelity’s VR and LT IDR if the sovereign is upgraded.