The Development Bank of Nigeria (DBN) has doubled its loan portfolio to N215.1 billion, as Agusto & Co. assigns a triple “A” rating, with a stable outlook on the institution.
DBN’s Managing Director, Mr. Tony Opkanachi, who provided the loan portfolio data in a statement, yesterday, said that his team was excited about the AAA rating.
His words, “We are excited by this independent assessment of our operations, as it provides an objective opinion on the bank’s credibility and capacity in meeting short and long-term obligations.”
The AAA rating by Nigeria’s foremost credit rating agency, is the highest possible on an organization.
He said that the bank has 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.
“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.”
According to Vanguard, the MD said that in pursuit of its mandate of enhancing access to credit for micro, small and medium scale enterprises (MSMEs), DBN continued to expand the scope of its operations, onboarding 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 ultimate credit beneficiaries.
Mr. Okpanachi pledged to uphold gold 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.
Notwithstanding the pandemic, DBN doubled its loan portfolio to N215.1billion, leveraging its robust risk management practice in deepening credit penetration to over 136,000 MSMEs.
In summarizing the 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”.
It added, “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.”
Agusto’s rating aligns with a recent decision of Global Credit Ratings (GCR), which also assigned “AAA” national scale rating on DBN.