November 28, 2012 / 11:12 AM / 5 years ago

TEXT-S&P summary: Zenith Bank PLC

3 Min Read

(The following statement was released by the rating agency)

Nov 28 -

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Summary analysis -- Zenith Bank PLC ------------------------------- 28-Nov-2012

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CREDIT RATING: BB-/Stable/B Country: Nigeria

Primary SIC: Commercial banks,

nec

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Credit Rating History:

Local currency Foreign currency

09-Nov-2012 BB-/B BB-/B

24-Aug-2009 B+/B B+/B

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Ratings Score Snapshot

Issuer Credit Rating BB-/Stable/B

SACP bb

Anchor bb-

Business Position Adequate (0)

Capital and Earnings Adequate (0)

Risk Position Strong (+1)

Funding and Liquidity Above Average

and Adequate (0)

Support 0

GRE Support 0

Group Support 0

Sovereign Support 0

Additional Factors -1

Major Rating Factors

Strengths:

-- A leading top-tier bank, with strong revenue growth, supporting adequate capitalization.

-- A strong risk position underpinned by Zenith's prudent underwriting standards and moderate loan growth target.

-- Stable core deposit base with strong liquidity indicators.

Weaknesses:

-- Moderately high single-name and industry loan concentrations.

-- High economic and industry risk associated with operating in Nigeria

-- Limited geographic diversification

Outlook

The stable outlook on Zenith Bank PLC reflects that on the sovereign (Federal Republic of Nigeria, BB-/Stable/B). It also reflects Standard & Poor's Ratings Services' 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 a stand-alone credit profile (SACP) of at least 'bb'. A downgrade of the sovereign rating would trigger a downgrade of the bank.

Related Criteria And Research

All articles listed below are available on RatingsDirect on the Global Credit Portal, unless otherwise stated.

-- Banks: Rating Methodology And Assumptions, Nov. 9, 2011

-- Banking Industry Country Risk Assessment Methodology And Assumptions, Nov. 9, 2011

-- BICRA On Nigeria Revised To Group '8' From Group '9', Nov. 9, 2011

-- Bank Hybrid Capital Methodology And Assumptions, Nov. 1, 2011

-- Bank Capital Methodology And Assumptions, Dec. 6, 2010

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