Saturday, August 2, 2025
23.6 C
Lagos

Agusto Upgrades Wema Bank Funding SPV Series II Bond to ‘Bbb+’, Stable Outlook

Ratings agency Agusto & Co. has upgraded Wema Bank Funding SPV Plc’s Series II Bond to ‘Bbb+’, with a stable outlook, from the previous ‘Bbb’ score. The Issuer is a Special Purpose Vehicle (SPV) set up by Wema Bank Plc for the issuance of debt securities.

Agusto in its latest rating assessment released on Tuesday said it upgraded the rating of Wema Bank Funding SPV Plc’s Series II ₦17.7 billion seven-year fixed rate bond to ‘Bbb+’ as a result of significant improvement on key metrics of assessment.

‘‘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.

It further noted that ‘Bbb+’ assigned Wema Bank affirmed the leading financial institution’s improved profitability, satisfactory asset quality and liquidity profile.

‘‘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.

Commenting on the report, Wema Bank’s Managing Director/Chief Executive Officer, Mr. Ademola Adebise, stated: ‘‘Wema Bank welcomes with excitement this latest positive assessment. This important rating adds to the series of positive outlooks that credible independent global ratings agencies have given to our bank which affirms the resilience of our bank 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.’’

Agusto & Co. explained that the rating validity for the bank subsists up until 10 September 2023, but noted, however, that constraining these positive factors are the elevated operating cost profile, the harsh regulatory environment and prevailing macroeconomic headwinds.

Wema Bank’s fascinating upward trajectory was acknowledged recently when it emerged as the best performing bank in the first half of year 2022 financial year with a weighted average score of 2.83 points ahead of 12 other banks.

The Nigerian banking performance HY 2022 prepared by Nairametrics showed that Wema Bank surpassed others on several key metrics including total asset growth, loan book growth, profit growth, cost-to-income ratio movement, and return on average equity.

In similar vein, global rating agency Fitch affirmed Wema Bank’s Long-Term Issuer Default Rating (IDR) at ‘B-‘ with a Stable Outlook, Viability Rating (VR) at ‘b-‘ and National Long-Term Rating at ‘BBB (nga)’, in July 2022. Amongst the key rating drivers (KRDs), Fitch stated that Wema’s IDRs were driven by its standalone creditworthiness, as expressed by its VR. The VR reflects Wema’s small franchise, high credit concentrations, aggressive loan and balance-sheet growth and funding weaknesses.

It also reflected good asset quality and expectation of a significant improvement in capitalisation and leverage, due to a material rights issue due to be concluded by end-2022.

 

spot_img
spot_img

Hot this week

NCDMB Leads Push for Homegrown Talents at Chevron-funded HCD Graduation

The Nigerian Content Development and Monitoring Board has reaffirmed...

Linkage Assurance Reports 50% Revenue Growth in 2024

L-R: Funkazi Koroye-Crooks, Non-Executive Director; Moses Omoregbe, Company Secretary;...

Heirs Insurance Unveils Creators Fellowship, Partners with Influencers to Drive Insurance Literacy

L-R: Joseph Onaolapo (Jay On Air), Oluwadamilola Bello (Dammy B) As...

Two NCDMB Leaders Bag Doctorate Degrees at UNIPORT Convocation

Two senior officials of the Nigerian Content Development and...

Sovereign Trust Insurance Reports 109% Insurance Revenue Growth in 2024

Sovereign Trust Insurance Plc recently released its 2024 audited...

Topics

NAICOM Migrates to Online Operations Effective Sept 1

The National Insurance Commission (NAICOM) says its operations will...

NCC EVC: ‘We’ve Deactivated All Improperly-registered SIM Cards’

  Prof. Umar Danbatta Executive Vice-Chairman/CEO NCC “By our records, all improperly-registered Subscriber...

NGX, PenCom to Deepen PFAs’ Equity Participation with Pension Broad Index

Nigerian Exchange Limited, in collaboration with the National Pension...

Nigeria Ranks 127 in WEF 2016-2017 Global Competitiveness Report

Mauritius remains Africa’s most competitive nation (45th worldwide), World...

AfDB Approves Policy on Non-Sovereign Operations

The Board of Directors of the African Development Bank...

Gartner: $11.4bn Mobile Advertising Revenue in 2013

­Worldwide mobile advertising revenue is forecast to reach $11.4...

NIA: Brokers Generated 60% of Insurance Premium in 2021

L-R; Hon Auditor, the Nigerian Council of Registered Insurance...

NAICOM Unveils Guidelines for Insurance Web Aggregators

The National Insurance Commission (NAICOM) has unveiled Operational Guidelines...
spot_img

Related Articles

Popular Categories

spot_imgspot_img