Development Bank of Nigeria Plc is rated ‘AAA’ by Agusto and Co., with a stable outlook

Development Bank of Nigeria Plc – Agusto& Co., the leading credit rating agency, has given the Development Bank of Nigeria Plc (DBN) a “AAA” rating, the highest attainable for any institution.

In a summary of the rating, Agusto described DBN as “a development financing organization of flawless financial condition and overwhelming capacity to meet commitments as and when they fall due,” which fits with the Nigerian Sovereign’s “risk-free” rating. DBN continues to broaden its operations in order to better serve micro, small, and medium-sized businesses (MSMEs), onboarding more Participating Financial Institutions (PFIs) and deepening credit penetration in the low end of the market, particularly among women entrepreneurs, who account for more than half of the bank’s ultimate credit beneficiaries.

“Despite the COVID-19 pandemic,” according to Agusto, “DBN boosted its financial support to Micro, Small and Medium Scale Enterprises (MSMEs) and small-sized corporates through participating banking institutions.” Despite the epidemic, DBN increased its loan portfolio to N215.1 billion, leveraging its strong risk management practices to reach over 136,000 MSMEs with loans.

“DBN’s outstanding asset quality, good capitalization, solid liquidity, and competent management team are also favorable rating factors,” Agusto added, emphasizing DBN’s impeccable fundamentals. DBN has maintained an extraordinary asset quality record with no delinquencies since its establishment, demonstrating the efficacy of its credit origination mechanism and overall risk management culture.

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The Bank has a BASEL II capital ratio of 75.2 percent, which is several times higher than the required minimum of 10%. The liquidity ratio hovered above 84 percent during the review period, compared to the 10 percent regulatory requirement, implying DBN’s ability to continue its quest of widening loan penetration among MSMEs. Agusto’s decision to award “Aaa” to DBN, with a stable outlook, is based on excellent financial indicators and impeccable governance norms.

DBN’s credit rating “takes into cognizance the support of the Bank’s shareholders – the Ministry of Finance Incorporated, Nigeria Sovereign Investment Authority (NSIA), Africa Development Bank (AfDB), and the European Investment Bank,” according to Agusto (EIB). Standard and Poor’s, Moody’s, and Fitch Ratings all have Aaa ratings for AfDB and EIB. AfDB offers DBN with long-term financial, technical, and business support in addition to equity contributions. Other international development finance institutions such as the French Development Agency (AFD), KfW – the German Development Bank, and the World Bank, which provide funds and technical assistance as well as enhancing governance, are also considered in the rating.”

“We are excited by this independent appraisal of our operations, as it provides an impartial judgment on the bank’s credibility and capacity in delivering short and long-term obligations,” said Tony Okpanachi, Managing Director/CEO, Development Bank of Nigeria. The rigorous and exhaustive process that underpins Agusto’s rating is impressive, and I’m glad that the bank was given the highest possible grade, “Aaa.” This rating action coincides with a recent decision by Global Credit Ratings (GCR), another leading rating agency, which awarded DBN a “AAA” national scale rating. We would maintain these well-deserved ratings, which are relevant to our medium- to long-term aims, as we implement our unique methods for unlocking credit for MSMEs, as long as we continue to preserve gold standards in risk management and governance practices.”

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“Agusto’s assignment of “Aaa” on the Bank is another testament to the strong credibility and capacity of the Bank, as a distinguished development finance institution with an impeccable and overwhelming capacity to meet obligations and deliver on its core mandate,” said Mrs. IjeomaOzulumba, Executive Director, Finance & Corporate Services. We will continue to use the bank’s balance sheet strength, global best governance practices, robust risk management framework, and collaborative approach to make credit more accessible to Nigeria’s growing MSMEs, which have the potential to create jobs, industrialize the economy, and drive long-term growth.”

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