The rating expires on 7 January 2023.
Agusto & Co. affirms the ‘A–’ rating assigned to Fidelity Bank Plc’s (‘Fidelity Bank’, ‘the Bank’ or ‘the Issuer’) ₦41.2 billion 10-year Subordinated Unsecured Fixed Rate Series 1 Bond (‘the Issue’ or ‘the Bond’) due in 2031. The Issue represents the first series of the ₦100 billion bond issuance programme registered in April 2020 with the Securities and Exchange Commission (SEC). The rating assigned to the Bond reflects the Issue’s subordinated status as it ranks pari passu with all other existing and future subordinated and unsecured obligations of the Issuer.
The rating also reflects Fidelity Bank’s improved profitability, strong ability to refinance, adequate capitalisation and satisfactory asset quality. However, constraining the rating is the obligor concentration in the loan portfolio, a significant deterioration in the quality of obligors according to the Bank’s internal rating model, the slowly recovering economy and the adverse effects of inflation on operating costs. In addition, the adverse impact of regulatory costs on the profitability of the banking industry is also a constraint.
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