Rating Release
Agusto & Co. hereby assigns an indicative ‘A’ rating to NECIT Nigeria Limited’s ₦10 billion Commercial Papers under the ₦20 billion Programme
The rating expires on 30 June 2024.
Agusto & Co. hereby assigns an indicative ‘A’ rating to NECIT Nigeria Limited’s (“NECIT” or the Company” or “the Issuer”) up to ₦10 billion Commercial Papers (“the Issue” or “Series 3” or the “ Notes”) of 270 days under its ₦20 billion Commercial Paper Issuance Programme (“the Programme”). The assigned rating is hinged on the irrevocable, absolute and unconditional guarantee provided by Fidelity Bank PLC (“Fidelity” or “the Bank” or “the Guarantor”) for repayment of the principal and coupon obligations to the Noteholders as and when due. The guarantee allows Fidelity Bank PLC to step in and fund the Payment Account after obtaining a written notification from the Trustees at least five calendar days before any scheduled Payment Date if the Issuer has indeed defaulted in the performance of its payment obligations. Fidelity Bank PLC is rated “A” by Agusto & Co., reflective of the Guarantor’s good financial condition and strong capacity to meet obligations as and when due.
Fidelity Bank PLC is a tier 2 commercial bank with an asset base (including contingent assets) of approximately ₦4.7 trillion and total deposits of ₦3.3 trillion as at 31 December 2022. The Bank primarily provides banking services to corporates, small and medium enterprises, and individual and public sector customers. In 2022, the Bank reported net earnings of ₦174.5 billion (2021: ₦121. 5 billion) while its pre-tax profit grew significantly by 112.9% year-on-year to ₦53.7 billion. Consequently, the Guarantor reported improved profitability ratios – a pre-tax return on average equity (ROE) of 20.1% (FYE 2021: 10.4%) and a pre-tax return on average assets and contingents (ROA) of 1.3% (FYE 2021: 0.7%). Overall, Fidelity Bank PLC has adequate capitalisation, a low level of impaired credits, good market share, strong ability to refinance and stable management.
The opinions expressed in this rating release do not represent any investment or other advice and should therefore not be construed as such. Visit www.agusto.com for further information.