Limassol, December 10, 2020 -- Moody's Investors Service ("Moody's") has today
taken various ratings actions on some ratings of 32 banks across 10 African
countries: Angola, Democratic Republic of Congo, Egypt,
Ghana, Kenya, Morocco, Nigeria, Tanzania,
Tunisia and Uganda.
The rating actions are driven by changes in the local currency (LC) and
foreign currency (FC) country ceilings applied to the jurisdictions of
the banks following the publication of Moody's updated Country Ceilings
Methodology on 7 December 2020. This methodology is available at
this link: https://www.moodys.com/research/--PBC_1225594.
As a result of the methodology change, FC ceilings for FC deposits
were raised in 9 African countries (Angola, Egypt, Ghana,
Kenya, Morocco, Nigeria, Tanzania, Tunisia and
Uganda), resulting in upgrades of FC deposits of 31 banks in these
jurisdictions.
At the same time, FC ceilings applicable to debt obligations were
lowered in 3 African countries (Angola, Democratic Republic of Congo
and Nigeria), resulting in downgrades of FC counterparty risk ratings
of 6 banks in these jurisdictions.
Today's rating actions cover: (1) Banco Angolano de Investimentos,
S.A., (2) Banco de Fomento Angola, S.A.,
(3) Banque Commerciale du Congo S.A., (4) Bank of
Alexandria SAE, (5) Banque du Caire SAE, (6) Banque Misr SAE,
(7) Commercial International Bank (Egypt) SAE, (8) National Bank
of Egypt SAE, (9) GCB Bank Limited, (10) Co-operative
Bank of Kenya Limited, (11) Equity Bank (Kenya) Limited, (12)
KCB Bank Kenya Limited, (13) Attijariwafa bank, (14) Bank
of Africa - BMCE Group, (15) Credit du Maroc, (16)
Groupe Banque Centrale Populaire, (17) Access Bank Plc, (18)
FCMB (First City Monument Bank) Limited, (19) Fidelity Bank plc,
(20) First Bank of Nigeria Limited, (21) Guaranty Trust Bank Plc,
(22) Sterling Bank Plc, (23) Union Bank of Nigeria plc, (24)
United Bank for Africa Plc, (25) Zenith Bank Plc, (26) CRDB
Bank Plc, (27) NMB Bank PLC, (28) Amen Bank, (29) Arab
Tunisian Bank, (30) Banque de Tunisie, (31) Banque Internationale
Arabe de Tunisie and (32) Stanbic Bank Uganda Limited.
Please click on this link https://www.moodys.com/viewresearchdoc.aspx?docid=PBC_ARFTL436961
for the List of Affected Credit Ratings. This list is an integral
part of this Press Release and identifies each affected issuer.
RATINGS RATIONALE
Today's rating actions on 32 banks in Africa are driven by changes
in country ceilings under Moody's updated country ceilings methodology.
Country ceilings typically indicate the highest rating level that would
generally be assigned to the financially strongest obligations of issuers
domiciled in a country, absent exceptional considerations such as
external support from outside the country.
The updated ceilings methodology has unified deposit ceilings with the
typically higher debt ceilings, whereby LC and FC country ceilings
are no longer distinguished between deposit and debt ceilings.
These changes reflect Moody's view that the risks that affect access
to bank deposits are not materially different from those that affect the
ability of banks and non-banks to service their debt obligations.
NATIONAL SCALE RATINGS (NSRs)
As a result of the upgrade in the FC long-term deposit ratings
of 13 banks in Morocco and Nigeria, Moody's also upgraded
the FC NSR long-term deposit ratings of those 13 banks.
At the same time, Moody's also upgraded the FC NSR short-term
deposit ratings of 9 Nigerian banks and downgraded the FC NSR counterparty
risk ratings of 3 Nigerian banks.
OUTLOOK
The outlooks on deposit and/or senior debt ratings for 27 of the 32 banks
affected by today's rating actions remain unchanged.
At the same time, Moody's has assigned a stable outlook to
foreign currency long-term deposit ratings of 5 Egyptian banks:
Bank of Alexandria SAE, Banque du Caire SAE, Banque Misr SAE,
Commercial International Bank (Egypt) SAE and National Bank of Egypt SAE.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Angola
An upgrade of Angola's sovereign rating and improvements of banks standalone
credit profiles could put upward pressure on banks' ratings.
Any deterioration in the Angolan banking macro profile and/or in the creditworthiness
of Angola government will likely result in downgrades of banks'
ratings. A deterioration in the banks' standalone profiles
beyond what is captured in the current ratings could also lead to downgrades.
Democratic Republic of Congo (DRC)
Upwards pressure on the ratings of Banque Commerciale du Congo could result
from an improvement in asset quality or capitalisation, or an improvement
in DRC's operating environment.
Downwards pressure on the ratings of Banque Commerciale du Congo could
result from a significant deterioration in asset quality or a material
weakening in funding and liquidity.
Egypt
Egyptian banks' ratings could be upgraded if there is a further
strengthening of the operating and macroeconomic environment, accompanied
by an upgrade of Egypt's sovereign rating and combined with banks'
resilient financial performance.
Downward pressure on Egyptian banks' ratings would develop following
a downgrade of the sovereign rating, reflecting the high interlinks
between the banks' credit profile and that of the government. Downward
pressure on banks' BCA could also develop from a greater-than-expected
deterioration in asset quality, or a decline in the banks' capital,
profitability and foreign currency liquidity buffers.
Ghana
Any upward rating pressure on GCB Bank's ratings is limited given the
negative outlook. The bank's outlook could change back to stable
if the sovereign rating outlook is changed back to stable and if the bank's
financial metrics remain commensurate to similarly rated global peers.
GCB Bank's ratings could be downgraded if the sovereign rating is downgraded,
given the sizable holding of sovereign debt securities, or if Ghana's
operating environment weakens or if the bank's financial metrics weaken
materially, beyond the thresholds assumed by the current rating
level.
Kenya
Any upward rating pressure on the Kenyan banks' ratings is limited given
the negative outlook. The banks' outlook could change back to stable
if the sovereign rating outlook is changed back to stable and if Moody's
assesses that the Kenyan operating environment has not significantly deteriorated
and if the banks' financial metrics remain at least commensurate to similarly
rated global peers.
Kenyan banks' ratings could be downgraded if the sovereign rating is downgraded,
given the banks' sizeable holdings of sovereign debt securities,
or if Moody's expects Kenya's operating environment to weaken or if the
banks' financial metrics weaken materially, beyond the thresholds
assumed by the current rating level.
Morocco
Upwards pressure on the long-term ratings of Moroccan banks is
limited given their positioning at the same level as the sovereign rating.
Upwards pressure on their BCAs could develop through improved asset quality
and capitalisation, and/or a material improvement in the operating
environment of the various Sub-Saharan jurisdictions in which the
Moroccan banks with cross-border operations operate.
Downwards pressure on the ratings of Moroccan banks could develop from
a deterioration in the sovereign's credit profile, or a weakening
in the banks' asset quality and capitalisation.
Nigeria
Upward rating momentum for Nigerian banks ratings is limited, given
the negative outlook. However, a change in the sovereign
rating outlook could lead to stabilisation of the banks' outlook
if they maintain resilient financial performance.
A downgrade of Nigeria's sovereign rating would exert downward pressure
on banks' ratings given the interlinkages. In addition,
any deterioration in banks' financial profiles beyond what is captured
in their current ratings could lead to downgrades.
Tanzania
Upwards pressure on the long-term ratings and BCAs of Tanzanian
banks is limited given their positioning at the same level as the sovereign
rating. A higher sovereign rating could lead to upwards pressure
on the banks' ratings.
Downwards pressure on the ratings of Tanzanian banks could develop from
a deterioration in the sovereign's credit profile, a weakening in
the banks' asset quality and capitalisation, and/or a significant
decline in liquidity.
Tunisia
Upward pressure on banks' ratings is limited as indicated by the negative
outlook. However, the outlook on the ratings would likely
be stabilised if Tunisia's sovereign rating outlook is changed to stable
from negative. This could also be conditioned by a material improvement
in the banks' asset quality, a reduction in provisioning requirements,
an increase in loss-absorptions buffers and a material/sustained
reduction in reliance on central bank funding.
Conversely, since all five Tunisian banks benefit from government
support uplift from their respective BCAs, downward pressure on
banks' ratings would develop following a downgrade of the sovereign rating
signaling a reduction in the government's capacity to extend financial
support to banks in case of need. Downward pressure on the BCAs
of some banks could also develop from a greater-than-expected
deterioration in operating conditions from the coronavirus spread weakening
their asset quality, profitability, capital adequacy and/or
liquidity.
Uganda
An upgrade of the bank's ratings could be triggered by improvements in
its financial profile.
Stanbic Uganda's ratings could be downgraded in the event of a downgrade
of Uganda's ratings. Any significant deterioration in Stanbic
Uganda's financial performance could negatively impact the bank's
standalone credit profile and deposit ratings. The ratings could
also be downgraded if we assess that SBG's willingness to provide support
is lower than our current assumptions.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Banks Methodology
published in November 2019 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1147865.
Alternatively, please see the Rating Methodologies page on www.moodys.com
for a copy of this methodology.
Moody's National Scale Credit Ratings (NSRs) are intended as relative
measures of creditworthiness among debt issues and issuers within a country,
enabling market participants to better differentiate relative risks.
NSRs differ from Moody's global scale credit ratings in that they are
not globally comparable with the full universe of Moody's rated entities,
but only with NSRs for other rated debt issues and issuers within the
same country. NSRs are designated by a ".nn"
country modifier signifying the relevant country, as in ".za"
for South Africa. For further information on Moody's approach to
national scale credit ratings, please refer to Moody's Credit rating
Methodology published in May 2016 entitled "Mapping National Scale Ratings
from Global Scale Ratings". While NSRs have no inherent absolute
meaning in terms of default risk or expected loss, a historical
probability of default consistent with a given NSR can be inferred from
the GSR to which it maps back at that particular point in time.
For information on the historical default rates associated with different
global scale rating categories over different investment horizons,
please see https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1216309.
The local market analyst for Banque Commerciale Du Congo S.A.,
Attijariwafa bank, Groupe Banque Centrale Populaire, Bank
of Africa - BMCE Group, Credit du Maroc, Union Bank
of Nigeria plc and Access Bank Plc ratings is Mik Kabeya, +971
(423) 795-90. The local market analyst for Banque de Tunisie,
Banque Internationale Arabe de Tunisie, Amen Bank and Arab Tunisian
Bank ratings is Badis Shubailat, +971 (423) 795-05.
REGULATORY DISCLOSURES
The List of Affected Credit Ratings announced here are a mix of solicited
and unsolicited credit ratings. Additionally, the List of
Affected Credit Ratings includes additional disclosures that vary with
regard to some of the ratings. Please click on this link https://www.moodys.com/viewresearchdoc.aspx?docid=PBC_ARFTL436961
for the List of Affected Credit Ratings. This list is an integral
part of this Press Release and provides, for each of the credit
ratings covered, Moody's disclosures on the following items:
• Endorsement
• Rating Solicitation
• Issuer Participation
• Participation: Access to Management
• Participation: Access to Internal Documents
• Disclosure to Rated Entity
• Lead Analyst
• Releasing Office
For further specification of Moody's key rating assumptions and
sensitivity analysis, see the sections Methodology Assumptions and
Sensitivity to Assumptions in the disclosure form. Moody's
Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.
For ratings issued on a program, series, category/class of
debt or security this announcement provides certain regulatory disclosures
in relation to each rating of a subsequently issued bond or note of the
same series, category/class of debt, security or pursuant
to a program for which the ratings are derived exclusively from existing
ratings in accordance with Moody's rating practices. For ratings
issued on a support provider, this announcement provides certain
regulatory disclosures in relation to the credit rating action on the
support provider and in relation to each particular credit rating action
for securities that derive their credit ratings from the support provider's
credit rating. For provisional ratings, this announcement
provides certain regulatory disclosures in relation to the provisional
rating assigned, and in relation to a definitive rating that may
be assigned subsequent to the final issuance of the debt, in each
case where the transaction structure and terms have not changed prior
to the assignment of the definitive rating in a manner that would have
affected the rating. For further information please see the ratings
tab on the issuer/entity page for the respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this credit rating action,
and whose ratings may change as a result of this credit rating action,
the associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
Moody's general principles for assessing environmental, social
and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1133569.
The below contact information is provided for information purposes only.
Please see the ratings tab of the issuer page at www.moodys.com,
for each of the ratings covered, Moody's disclosures on the
lead rating analyst and the Moody's legal entity that has issued
the ratings.
The person who approved Banco de Fomento Angola, S.A.,
Banque Commerciale Du Congo S.A., Bank of Alexandria
SAE, Banque Misr SAE, Banque du Caire SAE, Commercial
International Bank (Egypt) SAE, National Bank of Egypt SAE,
GCB Bank Limited, Co-operative Bank of Kenya Limited,
Equity Bank (Kenya) Limited, KCB Bank Kenya Limited, Attijariwafa
bank, Groupe Banque Centrale Populaire, Bank of Africa -
BMCE Group, Credit du Maroc, Zenith Bank Plc, Guaranty
Trust Bank Plc, United Bank for Africa Plc, FCMB (First City
Monument Bank) Limited, Access Bank Plc, Fidelity Bank plc,
First Bank of Nigeria Limited, CRDB Bank Plc, NMB Bank PLC,
Banque de Tunisie, Banque Internationale Arabe de Tunisie,
Amen Bank, Arab Tunisian Bank, Stanbic Bank Uganda Limited
credit ratings is Sean Marion, MD-Financial Institutions,
Financial Institutions Group, JOURNALISTS: 44 20 7772 5456,
Client Service: 44 20 7772 5454. The person who approved
Banco Angolano de Investimentos, S.A., Union
Bank of Nigeria plc, Sterling Bank Plc credit ratings is Antonello
Aquino, Associate Managing Director, Financial Institutions
Group, JOURNALISTS: 44 20 7772 5456, Client Service:
44 20 7772 5454.
The relevant office for each credit rating is identified in "Debt/deal
box" on the Ratings tab in the Debt/Deal List section of each issuer/entity
page of the website.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Constantinos Kypreos
Senior Vice President
Financial Institutions Group
Moody's Investors Service Cyprus Ltd.
Porto Bello Building
1, Siafi Street, 3042 Limassol
PO Box 53205
Limassol CY 3301
Cyprus
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454
Antonello Aquino
Associate Managing Director
Financial Institutions Group
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454
Releasing Office:
Moody's Investors Service Cyprus Ltd.
Porto Bello Building
1, Siafi Street, 3042 Limassol
PO Box 53205
Limassol CY 3301
Cyprus
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454
