TEXT-S&P raises rtgs on 3 Nigerian banks to 'BB-'

OVERVIEW
-- On Nov. 7, 2012, we raised the long-term sovereign credit ratings on
the Federal Republic of Nigeria to 'BB-' from 'B+'. The outlook is stable.
-- Consequently, we are raising the long-term counterparty credit ratings
on First Bank of Nigeria, Zenith Bank, and Guaranty
Trust Bank to 'BB-' from 'B+'. We are also raising the long-term
Nigeria national scale ratings on the banks to 'ngAA-' from 'ngA+'.
-- The stable outlook on the three banks reflects that on the sovereign
and our view that the banks' business and financial profiles will remain
relatively unchanged over the next 12 months.

Nov 9 - Standard & Poor's Ratings Services today raised its long-term
counterparty credit ratings on First Bank of Nigeria Ltd. (FBN), Zenith Bank PLC
(Zenith), and Guaranty Trust Bank PLC (GTB) to 'BB-' from 'B+'. At the same
time, the 'B' short-term counterparty credit ratings on all three banks were
affirmed. The outlooks are stable. We also raised the Nigeria national scale
long-term ratings on FBN, Zenith, and GTB to 'ngAA-' from 'ngA+' and affirmed
the 'ngA-1' short-term ratings.

RATIONALE
The rating actions on FBN, Zenith, and GTB follow the upgrade of the Federal
Republic of Nigeria (see "Long-Term Rating On Nigeria Raised To 'BB-' On
Improved Fiscal And External Buffers And Strong Growth; Outlook Stable,"
published on RatingsDirect on Nov. 7, 2012). The sovereign upgrade reflects
our view of an improvement in the government's fiscal buffer and external
position, as well as ongoing reform momentum. We believe these factors will
benefit the three rated Nigerian banks through the improved quality of their
large exposure to the sovereign (treasury bills and other government or
government-related debt account for about 25%-30% of the banks' total assets)
and expected strong economic growth, especially in the non-oil sector.

Standard & Poor's does not rate Nigerian banks above the foreign currency
sovereign credit ratings because of the direct and indirect influence the
sovereign in distress would have on a bank's operations, including its ability
to service foreign currency obligations. The long-term counterparty credit
rating on Zenith remains constrained by the 'BB-' foreign currency sovereign
credit rating on Nigeria.

The ratings on FBN and GTB reflect their SACPs of 'bb-'.

FIRST BANK OF NIGERIA

The stable outlook on FBN reflects the stable economic environment and our
view that the bank's business and financial profiles will remain relatively
unchanged over the next 12 months. We expect FBN to retain its strong market
position as Nigerian banking sector leader, with relatively stable revenues
and moderate geographic diversification. The bank's capitalization should
remain in the 5%-6% range under Standard & Poor's risk-adjusted capital (RAC)
methodology, but there could be downward ratings pressure if loans grow faster
than we currently anticipate. In our view, positive economic prospects should
keep asset quality and loss experience at currently good levels, although a
focus on lending to midsize companies may pressure this in the next 12-18
months. We could lower the ratings if the bank's capitalization deteriorates,
specifically if we forecast the RAC ratio to go to below 5% in the next 18
months. We could also lower the ratings if the inherent risks in the loan
book, such as foreign currency lending and high single-name and industry risk
concentrations materialize and loan-loss or asset-quality indicators
deteriorate, or if loan growth reaches unsustainably high levels. We are
unlikely to raise the ratings in the short term. This would only follow a
sovereign upgrade and improvements in the bank's business and/or financial
profiles. A sovereign downgrade would trigger a downgrade of the bank.

GUARANTY TRUST BANK
The stable outlook on GTB reflects the stable economic environment and our
view that the bank's business and financial profiles will remain relatively
unchanged over the next 12 months. In our view, the positive economic
prospects in Nigeria will further support GTB's business relationships and
earning capacity. We anticipate that GTB's capitalization will increase
slightly over the next 12-18 months, owing to a strong earning capacity that
comes from high margins and low cost of risk. We also assume that GTB will
maintain its stable funding and liquidity profile.

We would raise the ratings on GTB if the bank's sector and single-name
concentrations were to reduce, as well as if its cost of risk becomes
significantly lower than sector peers. An upgrade would also require the
long-term foreign currency sovereign credit ratings to be raised.

We could lower the ratings on GTB if its financial profile were to deteriorate
significantly. Although unlikely, this could follow a sharp deterioration in
asset quality and a change in risk appetite. A sovereign downgrade would
trigger a downgrade of the bank.

ZENITH BANK
The stable outlook on Zenith reflects that on the sovereign and our 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 an SACP of at least 'bb'. A
downgrade of the sovereign rating would trigger a downgrade of the bank.

RELATED CRITERIA AND RESEARCH
-- Bank Hybrid Capital Methodology And Assumptions, Nov. 1, 2011
-- Banks: Rating Methodology And Assumptions, Nov. 9, 2011
-- Group Rating Methodology And Assumptions, Nov. 9, 2011
-- Use Of CreditWatch And Outlooks, Sept. 14, 2009

RATINGS LIST
To From
First Bank of Nigeria PLC
Zenith Bank PLC
Guaranty Trust Bank PLC
Counterparty Credit Rating BB-/Stable/B B+/Positive/B
Counterparty Credit Rating
Nigeria National Scale ngAA-/--/ngA-1 ngA+/--/ngA-1
N.B.-This does not include all ratings affected.

Complete ratings information is available to subscribers of RatingsDirect on
the Global Credit Portal at www.globalcreditportal.com. All ratings affected
by this rating action can be found on Standard & Poor's public Web site at
www.standardandpoors.com. Use the Ratings search box located in the left
column.