Fitch keeps Ecobank on negative rating watch, cites uncertainties in Oceanic Bank acquisition

Ratings agency Fitch says it has maintained Ecobank Transnational Incorporated (ETI)’s ‘B-‘ Long-term Issuer Default Rating (IDR), ‘B’ Short- term IDR and ‘b-‘ Viability Rating (VR) on Rating Watch Negative (RWN).

The agency said in a statement February 6, 2012 that the RWN reflects its view that there are still “uncertainties about ETI’s capitalisation and asset quality after the acquisition in November 2011 of Nigeria’s Oceanic Bank International Plc (Oceanic).”

Oceanic was one of the banks in Nigeria that had to be supported in 2009 by the central bank of Nigeria (CBN).

Although significant efforts have been made since 2009 by the CBN and subsequently ETI to improve the bank’s risk profile, Fitch explains that there are still uncertainties about Oceanic’s asset quality and capitalisation that have to be addressed by ETI.

Fitch indicates that the RWN is pending the completion of all transactions related to Oceanic’s acquisition announced in September 2011; the availability of robust information on the merged Ecobank Nigeria and Oceanic entity and ETI’s 2011 consolidated audited financial statements.

By Ekow Quandzie