Nigeria’s leading development finance institution, Development Bank of Nigeria (DBN) has secured Agusto & Co. triple “A” rating, with a stable outlook on the institution even as its credit to borrowers rose to N215.1 billion.
The Managing Director, Mr. Tony Opkanachi, who disclosed the loan portfolio figures in a statement on Tuesday, expressed the bank management’s excitement about the AAA rating, the highest possible rating any entity can get from rating agencies.
According to him, the triple ‘A’ rating by Agusto & Co provides an objective opinion on the bank’s credibility and capacity in meeting short and long-term obligations.
The development finance banking expert noted that the bank had sustained an outstanding asset quality record of nil delinquency, unique fundamentals which attest to the efficacy of its credit creation model and overall risk management culture.
He expatiated: “Notably, the Bank maintains a BASEL II capital ratio of 75.2%, several multiples of the minimum 10% regulatory requirement.
“During the review period, the liquidity ratio hovered around 84%, compared to the 10% regulatory requirement, which by implication is an indication of DBN’s capacity to sustain the pursuit of deepening credit penetration amongst MSMEs.
“The strong financial metrics complemented by impeccable governance standards reinforce Agusto’s decision to assign “AAA” on DBN, with a stable outlook”, the DBN boss stressed.
Okpanachi stated that in pursuit of its mandate of enhancing access to credit for micro, small and medium scale enterprises (MSMEs), DBN had continued to expand the scope of its operations, on-boarding more Participating Financial Institutions (PFIs) and deepening credit penetration in the low end of the market, particularly amongst women entrepreneurs, who represent over 50% of the bank’s credit beneficiaries.
The DBN boss promised that the management would continue to uphold high standards in risk management and governance practices, in order to sustain the ratings, considered as pertinent to DBN’s medium to long-term objectives, as it executes its unique strategies for unlocking credit for MSMEs.
Despite the devastating impact of the COVID-19 pandemic on the broad spectrum of the nation’s economy, the development finance institution increased its loan portfolio to N215.1billion, leveraging its robust risk management practice in deepening credit penetration to over 136,000 MSMEs.
In its summary of the lender’s rating, Agusto & Co described DBN as “a development finance institution of impeccable financial condition and overwhelming capacity to meet obligations as and when they fall due.
“Despite the COVID-19 pandemic, DBN increased its financial support to Micro, Small and Medium Scale Enterprises (MSMEs) and small-sized corporate through participating financial institutions.
“DBN’s good asset quality, good capitalization, good liquidity, and experienced management team are also positive rating factors.
“The rigorous and detailed process underlying Agusto’s rating is quite commendable, and I am pleased that the bank was assigned ‘AAA’, the highest rating possible”, the rating agency added.
The latest Agusto & Co rating on the bank aligns with a Global Credit Ratings’ (GCR) decision, which also assigned “AAA” national scale rating to the DBN.
