Agusto & Co. assigns an ‘A’ Rating to Fidelity Bank Plc with a stable outlook

Agusto & Co. has assigned an ‘A’ rating to Fidelity Bank Plc (‘Fidelity Bank’) or ‘the Bank’).

The rating assigned reflects Fidelity Bank’s strong industry position as evidenced by its leading position in the tier 2 banking segment.

The rating also considers the Bank’s good liquidity position, strong ability to refinance, adequate capitalization and satisfactory asset quality.

We have also factored in Fidelity Bank’s good staff productivity and experienced management team.  However, constraining the aforementioned positives are the obligor concentration in the loan book and the Bank’s high operating cost profile.

The assigned rating also reflects the impact of the harsh regulatory environment and prevailing macroeconomic headwinds accentuated by the COVID-19 pandemic.

We have attached a stable outlook to the rating of Fidelity Bank Plc. Our outlook is based on our expectation of controlled asset quality pressures and additional capital support should the  proposed  medium-term bond  be successful.

The rating and outlook will be continually monitored to ascertain the impact of the adverse economic climate. The rating expires on 31 December 2021.