By Babajide Komolafe

GCR Ratings (“GCR”) has  affirmed First Bank of Nigeria Limited’s national scale long and short-term ratings of A-(NG) and A2(NG) respectively, with the outlook revised to Stable from Negative Rating Watch.

Explaining the rationale for the rating, GCR in a statement said: “The national scale ratings on FirstBank reflect the strengths and weaknesses of FBN Holdings Plc, the parent company of the bank and one of the largest financial services group in Nigeria. 

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“FirstBank is regarded as the core entity within the Group, accounting for about 95% of the Group’s total assets at FY20. As such, the ratings of FirstBank are equalised to the Group’s Anchor Credit Evaluator.

“The revision of the rating outlook from Negative Rating Watch to Stable is underpinned by the prompt containment of the board of director (“board”) tensions and inherent operational risk which triggered regulatory interventions and consequently the reconstitution of both the bank and Group’s board by the Central Bank of Nigeria (“CBN”) in April 2021. 

“GCR will, however, continue to monitor the management and governance assessment and would react accordingly should there be any adverse impact on operations from a reoccurrence of the highlighted issues within the short to medium-term. 

“The affirmed ratings reflect FirstBank’s well-established brand franchise, good geographic diversification, and robust funding and liquidity position. However, these strengths are partly offset by the subdued capitalisation and elevated concentration risk across obligor, sector, and foreign currency (“FCY”) exposures.”