S & P scores Zenith Bank BB- stable

Standard & Poor’s Ratings Services has scored Zenith Bank Plc BB- with outlook stable.
 S & P said Zenith Bank, a leading top-tier bank, has strengths in its strong revenue growth, supporting adequate capitalization  a strong risk position underpinned by Zenith’s prudent underwriting standards and moderate loan growth target; as well as has stable core deposit base with strong liquidity indicators.
Meanwhile, the bank’s weaknesses lay in moderately high single-name and industry loan concentrations; high economic and industry risk associated with operating in Nigeria; and limited geographic diversification, S & P said.
The stable outlook on Zenith Bank Plc, according the rating agency, reflects that on the sovereign (Federal Republic of Nigeria, BB-/Stable/B).
“It also reflects Standard & Poor’s Ratings Services’ view that the bank’s business and financial profile will remain relatively unchanged over the next 12 months. We anticipate that the positive economic prospects in Nigeria will support Zenith’s financial performance.
“We would raise the ratings on Zenith if we were to raise the ratings on the sovereign, provided that the bank maintained a stand-alone credit profile (SACP) of at least ‘bb’. A downgrade of the sovereign rating would trigger a downgrade of the bank,” it said.
The highlight of the rating shows that the bank scored zero in Business Position Adequate; zero in Capital and Earning Adequate; Risk Position Strong (+1); Funding and Liquidity Above Average and Adequate (0); and Support (0).
Others are GRE Support 0, Group Support 0, Sovereign Support 0, Additional Factors -1, and Major Rating Factors.

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