Moody's Investors Service has placed on review for downgrade the long-term ratings of 3 Nigerian banks -- Access Bank plc (Ba3/B1 RUR down, b2 RUR down), Sterling Bank plc (B2 RUR down, b3 RUR down) and Bank of Industry (Ba3 RUR down).
The reviews are driven by our assessment of the potential weakening of the Nigerian government's capacity and willingness to provide support to the banks in times of stress, if needed.
At the same time, the baseline credit assessments (BCAs) of Access Bank plc and Sterling Bank plc, the two commercial banks Moody's rates in Nigeria, have also been placed under review for downgrade to reflect: (1) the increasing risk posed by the direct and indirect exposures of the banks to the oil sector; and (2) the negative implications of low oil prices on the domestic economy more broadly, as reduced fiscal spending and currency devaluation pose additional asset quality risks as well as funding and liquidity challenges.
The reviews of the banks' ratings were triggered by the weakening of Nigeria's credit profile, as captured by Moody's placement of the government's issuer rating on review for downgrade on March 4, 2016.
