The Global Credit Ratings (GCR), has assigned the Development Bank of Nigeria “AAA” Long Term National Scale rating which is the highest rating for financial institutions, is in line with the “risk-free” rating of the Nigerian Sovereign and attests to DBN’s strong fundamentals and credibility. The
Managing Director/CEO, Development Bank of Nigeria, Mr. Tony Okpanachi expressed satisfaction on the development.
He said, “We are pleased with this debut rating of “AAA”, with a stable outlook, from GCR, one of the foremost rating agencies in Africa. “
We appreciate the rigorous and diligent assessment of GCR as it provides an additional layer of independent review of our governance and risk management practice, ESG principles, and broader management of the institution.
More importantly, the outcome of the rating exercise, as expressed in our “AAA” national scale rating, is a testament to our balance sheet capacity, quality of the risk asset portfolio, and sound risk management practice.
‘‘We would continue to adhere to global best practice in market interventions, as we remain committed to alleviating financing constraints faced by MSMEs and Small Corporates in Nigeria, through the provision of financing and partial credit guarantees to eligible financial intermediaries on a market-conforming and fully financially sustainable basis.
Also reacting, DBN’s Executive Director, Finance/Corporate Services, Mrs. Ijeoma Ozulumba said, “this credit rating reflects the strong credibility of the Bank, as we continue to preserve our strong fundamentals.
Ozulumba further said that the Bank will consolidate its lending activities while maintaining strong capitalization, stable funding, and robust liquidity.
“We look forward to deepening our penetration and broader impact, especially as the success of our market-development initiatives reinforces our optimism on unlocking credit to the MSMEs in a sustainable way that aligns with our ultimate objective of catalyzing inclusive growth and development of the Nigerian economy.’’
According to Global Credit Rating, the “AAA” rating conferred on DBN, further reinforces ‘‘unparalleled position of the Bank in meeting short and long-term obligations whilst also reflecting the unrivaled strength of the guarantee of its wholly-owned subsidiary – Impact Credit Guarantee Limited, which provides credit enhancements to MSMEs.’’
GCR noted that DBN’s emergence as a leading financial institution reflects the Bank’s “strong capitalization, minimal risk exposure and stable funding structure, complemented by sound liquidity profile”.
It says this underscores DBN’s capacity in delivering on its mission to alleviate financing constraints faced by Micro, Small, and Medium Scale Enterprises (MSMEs) in Nigeria.
With a capital adequacy ratio above 100%, GCR acknowledges that DBN’s strong capitalization and low leverage reinforce the rating strength and provides adequate headroom for scaling operations and growing the risk assets portfolio.
GCR considers DBN’s risk position as “neutral “, with no credit losses from inception to date, moderate intermediate operational risk exposure, absence of foreign exchange risk, and the Bank’s sound underwriting process which provides for adequate loan collateral coverage, with good recovery prospect.
“The stable outlook reflects our expectation that DBN will maintain strong capitalization and liquidity metrics over the next 12-18 months. Earnings are projected to be more reflective of core operations as the bank increases risk assets, with GCR’s core capital ratio expected to remain above the 30-35% band to sustain the risk score.”