TEXT-Fitch affirms Nigerian banks

(The following statement was released by the rating agency)
July 12 - Fitch Ratings has upgraded First Bank of Nigeria Plc's (First
Bank) Viability Rating (VR) to 'b' from 'b-' and Union Bank of Nigeria Plc's
(Union) VR to 'ccc' from 'c'. At the same time, Fidelity Bank Plc's (Fidelity)
Long-term National Rating was upgraded to 'BBB+(nga)' from 'BBB-(nga)' and its
National Short-term rating to 'F2(nga)' from 'F3(nga)'. The ratings of all other
Fitch-rated Nigerian banks were affirmed. A full list of rating actions is at
the end of this announcement.

The VRs of the Fitch-rated banks indicate highly speculative fundamental credit
quality, with no VRs above the 'b' range. This is due to an extremely
challenging operating environment, rapid underlying credit growth, concentrated
credit risk and weak - albeit improving - corporate governance and transparency
requirements.

In this context, the upgrade of First Bank's VR follows the sale of significant
loans to the Asset Management Corporation of Nigeria (AMCON) which has resulted
in material improvement in the bank's asset quality and reduced the concentrated
problem loans that were constraining the VR at 'b-'. The VR also reflects First
Bank's dominant domestic franchise and acceptable levels of Fitch Core Capital.

The upgrade of Union's VR acknowledges the restoration of the bank to solvency
through the injection of capital from AMCON and a private equity consortium.

Fidelity's National Ratings were upgraded due to the perceived level of support
that Fidelity could expect from the authorities if required. Strong support was
demonstrated across the sector during Nigeria's banking crisis which Fitch
expects would be repeated.

The IDRs and National Ratings of Access Bank Plc (Access), Diamond Bank Plc
(Diamond), Fidelity, First Bank, United Bank for Africa Plc (UBA) and Union are
derived from Fitch's perceived level of support from the authorities if
required. These banks' ratings are sensitive to a reduction in the level of
support Fitch views would be forthcoming from the Nigerian authorities - either
through indications of a reduced willingness to support or the ability to do so.
The latter would be signalled by a downgrade of Nigeria's 'BB-' sovereign
rating. In Union's case, the perceived level of support is enhanced by
substantial AMCON ownership.

Stanbic IBTC Bank Plc's (Stanbic IBTC) National Ratings are driven solely by
potential support from its majority parent, Standard Bank Group
('BBB+'/Negative). The ratings of Guaranty Trust Bank Plc (GTB) and Zenith Bank
Plc (Zenith) are based on these banks' individual strengths.

GTB and Zenith have the highest stand-alone VRs among the Nigerian banks at
'b+'. The VRs on these banks reflect their strong domestic franchises, superior
asset quality relative to peers and acceptable levels of capital. The ratings
also take into account their relatively resilient earnings throughout Nigeria's
banking crisis and GTB's positive outlier cost/income ratio. Upward potential
for these ratings is limited due to Nigeria's challenging operating environment.
The VRs could be sensitive to a material weakening of levels of core
capitalisation, possibly by loan growth exceeding retained earnings over time.
If this were to occur, GTB's Issuer Default Rating (IDR) could fall to its
Support Rating Floor (SRF) of 'B' while Zenith's IDR would not be affected due
to its SRF at 'B+'.

First Bank's VR at 'b' takes account of its improved asset quality and reduced
concentrations of problem loans following the sale of loans to AMCON. It also
acknowledges the bank's dominant domestic franchise and acceptable levels of
capital. The VR could be positively sensitive to a track record of stable asset
quality and maintenance of stable and/or improving Fitch Core Capital and
leverage ratios. Downward pressure is limited in the short-term following
significantly improved asset quality due to AMCON intervention.

Access's VR of 'b-' reflects earnings and asset quality that were sensitive to
the Nigerian banking crisis and a historically developing franchise. In the
medium-term, an upgrade could result from a track record of entrenching its
expanded franchise following the acquisition of Intercontinental Bank Plc and
stable asset quality through a cycle as well as stable or improving Fitch Core
Capital and leverage ratios. Downward pressure is limited in the near-term.

Diamond and UBA's 'b-' VRs reflect their low Fitch Core Capital ratios and weak
earnings through the banking crisis. The poor financial performance of these
institutions was driven by weak operating efficiencies and high levels of
impairment charges as a result of poor asset quality. Positive actions on these
ratings would be sensitive to Fitch Core Capital and leverage ratios increasing
significantly from current levels, possibly from demonstrating improved
efficiency and underwriting. Downward pressure on these VRs in the short to
medium term is limited following the sale of problem loans to AMCON during 2010
and 2011. This has materially improved the asset quality of these institutions.

Union's VR of 'ccc' has limited downward pressure given the bank's recent
capital injection. Positive rating sensitivity could come from a track record of
improving operating earnings and management's ability to transition from
restructuring a failed institution to running the bank as a going concern.

Stanbic IBTC's ratings could only change if there were a material change in
SBG's willingness or ability to support the bank.

A Special Report will be available shortly at www.fitchratings.com giving more
details on the banks discussed in this RAC. Credit updates and Full Rating
Reports on each of the individual banks will follow this.

The rating actions are as follows:

Access
Long-term foreign currency IDR: affirmed at 'B'. Stable Outlook
Short-term foreign currency IDR: affirmed at 'B'
National Long-term rating: affirmed at 'A-(nga)'
National Short-term rating: affirmed at 'F2(nga)'
Viability Rating: affirmed at 'b-'
Support Rating: affirmed at '4'
Support Rating Floor: affirmed at 'B'

Diamond
Long-term foreign currency IDR: affirmed at 'B'. Stable Outlook
Short-term foreign currency IDR: affirmed at 'B'
National Long-term rating: affirmed at 'BBB+(nga)'
National Short-term rating: affirmed at 'F2(nga)'
Viability Rating: affirmed at 'b-'
Support Rating: affirmed at '4'
Support Rating Floor: affirmed at 'B'

Fidelity
National Long-term rating: upgraded to 'BBB+(nga) from 'BBB-(nga)'
National Short-term rating: upgraded to 'F2(nga)' from 'F3(nga)'

First Bank
Long-term foreign currency IDR: affirmed at 'B+'. Stable Outlook
Short-term foreign currency IDR: affirmed at 'B'
National Long-term rating: affirmed at 'A+(nga)'
National Short-term rating: affirmed at 'F1(nga)'
Viability Rating: upgraded to 'b' from 'b-'
Support Rating: affirmed at '4'
Support Rating Floor: affirmed at 'B+'

GTB
Long-term foreign currency IDR: affirmed at 'B+'. Stable Outlook
Short-term foreign currency IDR: affirmed at 'B'
National Long-term rating: affirmed at 'AA-(nga)'
National Short-term rating: affirmed at 'F1+(nga)'
Viability Rating: affirmed at 'b+'
Support Rating: affirmed at '4'
Support Rating Floor: affirmed at 'B'

GTB Finance BV's Senior Notes, guaranteed by Guaranty Trust Bank: affirmed at
'B+', 'RR4'

GTB Finance BV's Global Medium-term Note Programme, guaranteed by Guaranty Trust
Bank: affirmed Long-term Rating at 'B+', 'RR4' and Short-term Rating at 'B'

Stanbic IBTC
National Long-term rating: affirmed at 'AAA(nga)'
National Short-term rating: affirmed at 'F1+(nga)'

UBA
Long-term foreign currency IDR: affirmed at 'B+'. Stable Outlook
Short-term foreign currency IDR: affirmed at 'B'
National Long-term rating: affirmed at 'A+(nga)'
National Short-term rating: affirmed at 'F1(nga)'
Viability Rating: affirmed at 'b-'
Support Rating: affirmed at '4'
Support Rating Floor: affirmed at 'B+'

Union
Long-term foreign currency IDR: affirmed at 'B+'. Stable Outlook
Short-term foreign currency IDR: affirmed at 'B'
National Long-term rating: affirmed at 'A+(nga)'
National Short-term rating: affirmed at 'F1(nga)'
Viability Rating: upgraded to 'ccc', from 'c'
Support Rating: affirmed at '4'
Support Rating Floor: affirmed at 'B+'

Zenith
Long-term foreign currency IDR: affirmed at 'B+'. Stable Outlook
Short-term foreign currency IDR: affirmed at 'B'
National Long-term rating: affirmed at 'AA-(nga)'
National Short-term rating: affirmed at 'F1+(nga)'
Viability Rating: affirmed at 'b+'
Support Rating: affirmed at '4'
Support Rating Floor: affirmed at 'B+'

(Caryn Trokie, New York Ratings Unit)