By Kayode Tokede
Fitch Ratings has affirmed Wema Bank PLC’s Long-Term Issuer Default Rating (IDR) at ‘B-’ and removed it from Rating Watch Negative (RWN).
According to Fitch, the outlook of the bank is stable.
The report stated that, the removal of the RWN on Wema’s IDRs, Viability Rating (VR) and National Ratings reflects Fitch’s expectation that, having recently received shareholder approval, plans for a significant rights issue in 3Q21 will likely proceed as intended and improve capitalisation and leverage to more acceptable levels.
“It also reflects our view that loan and asset growth will evolve at a slower pace than in recent years and near-term risks to the bank’s financial profile from the economic fallout of the pandemic have receded.
“The Stable Outlook on Wema’s Long-Term IDR reflects our view that the current rating has sufficient headroom to absorb moderate shocks from sustained downside risks to the operating environment over the next 12-18 months,” the report added.