Moody’s announces review ratings of BoI

By Kayode Tokede

Moody’s Investors Service has completed a periodic review of the ratings of Bank of Industry (BoI) and other ratings that are associated with the same analytical unit.

The review was conducted through a portfolio review discussion held on 26 May 2021 in which Moody’s reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee.

According to Moody’s key rating considerations, “Bank of Industry’s B2 corporate family rating (CFR) is driven by the entity’s b2 Baseline Credit Assessment (BCA).

“Its B2 issuer rating is based on the B2 CFR and the application of our Loss Given Default (LGD) analysis for speculative-grade companies.

Bank of Industry’s B2 CFR is effectively constrained at the level of Nigeria’s sovereign rating, primarily because of the high interlinks between its credit profile and that of the government.

“The CFR also reflect its robust capital buffers, an increasingly diversified funding base, and low level of nonperforming loans (NPLs) as the majority of the loan book is secured against bank guarantees and federal government bonds.

“However, the currently challenging operating environment creates vulnerabilities, especially for the bank’s asset quality and profitability metrics, while its funding base remains vulnerable to international investors’ risk appetite.”