DESPITE CHALLENGES, FITCH AFFIRMS CREDITWORTHINESS OF 8 NIGERIAN BANKS.

Barely a week after a global credit rating agency, Fitch Ratings declared that Nigerian banks are likely to face more challenges as the nation's benchmark interest rate continues to rise, the agency Friday affirmed the national ratings, which measures creditworthiness of eight Nigerian banks.

The banks are First Bank of Nigeria (FBN), United Bank for Africa (UBA), Fidelity Bank, Diamond Bank, First City Monument Bank (FCMB), Union Bank , Stanbic IBTC Bank, the Bank of Industry (BOI) as well as Stanbic IBTC Holdings (SIBTCH).

A statement from the international agency explained that the rating actions followed Fitch's downgrade of Nigeria's Long-Term Local Currency Issuer Default Rating (IDR) to 'B+' from 'BB-', as a result of which it now equalised with the long-term foreign currency IDR. It further explained that its latest action was driven by the change in Fitch's sovereign rating criteria.

'Following the sovereign criteria change and rating action, Fitch has recalibrated the National Rating scale for Nigeria. As a result the national ratings for the aforementioned banks were affirmed as there is no change in their relative creditworthiness,' it stated.

According to the agency, the national rating of UBA was based its standalone creditworthiness and was also underpinned by potential sovereign support.

Also, the national ratings of FBN, Fidelity, Diamond, FCMB and UBN were based on potential sovereign support given their systemic importance, just as...