Agusto & Co. assigns a “Bbb-” rating, with a ‘negative’ outlook to Wema Bank Plc
The rating expires on 30 June 2021.
The rating assigned to Wema Bank Plc (‘Wema Bank’ or ‘the Bank’) reflects improved earnings in the year under review and a marked growth in deposits liabilities supported by an emerging brand franchise and digital footprint. However, the rating is constrained by rising impairments in the loan portfolio with obligor concentration risks that threaten a further deterioration in asset quality and high funding and operational costs. Furthermore, the COVID-19 pandemic has accentuated credit risks in the lending landscape, adversely impacting the overall performance of the banking industry.
The negative outlook reflects the expected impact of the COVID-19 pandemic on the Bank’s performance in the near term. Agusto & Co will continue to monitor the performance of the Bank to reassess the impact of the pandemic going forward.
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