By Cynthia Ezekwe
Agusto & Co, Nigeria’s first credit rating agency and a pan African leader in credit ratings and credit reports,has upgraded the rating of Wema Bank Funding Special Purpose Vehicle (SPV) Plc’s Series II N17.7 billion seven-year fixed rate bond to ‘Bbb+’ as a result of significant improvement on key metrics of assessment.
This was disclosed in a report by Agusto & Co, where it affirmed that the ‘Bbb+’ assigned to Wema Bank was as a result of its improved profitability, satisfactory asset quality and liquidity profile.
‘‘The rating assigned to the bond is hinged on the Sponsor’s upgraded rating of ‘Bbb’ and is a notch higher given that 45% of the bond proceeds was invested in a 13.53%, 7-year Federal Government of Nigeria (FGN) bond and held in the custody of the Joint Trustees,’’ Agusto & Co stated in the report.
‘‘In the unlikely event of a default, this provides some recovery prospects. The upgrade in the rating assigned to Wema Bank reflects its improving profitability metrics, satisfactory asset quality and liquidity profile,’’ the report added.
The ratings agency explained that the rating validity for the bank subsists up until 10 September 2023, while stating that elevated operating cost profile, harsh regulatory environment and prevailing macroeconomic headwinds., are major constraints to the development.
Ademola Adebise,Wema Bank’s managing director/chief executive officer,who commented on the report, expressed excitement over the latest positive assessment. He noted that the rating adds to the series of positive outlooks that credible independent global ratings agencies have given to the bank which affirms its resilience as a stable financial institution.
“We are buoyed by these positive affirmations to recommit delivering innovative banking and financial solutions that foster inclusive growth for individuals and businesses, and more importantly pushing further Wema Bank’s frontiers as a major enabler of national economic growth,’’ Adebisi remarked.
