Standard & Poor's (S&P) Ratings Services has assigned its A-/A-2' long and short-term Nigeria national scale ratings to First City Monument Bank Plc (FCMB)effective May 2009. Despite the global financial sector turbulence, the international rating agencyalso affirmed the bank's 'B+/B' counterparty credit ratings for the second year running, with a stable outlook.

"The ratings take into account sound levels of capitalization, moderate profitability, and the bank's investment banking niche that supports its market position," said Standard & Poor's credit analyst Matthew Pirnie. The ratings on FCMB reflect the bank's stand-alone credit profile and do not factor in extraordinary support.

The ratings on FCMB is weighed against the high credit risks from rapid lending growth in 2008, the short-term funding profile, and inherently high economic and industry risks of operating in the Federal Republic of Nigeria (Nigeria; foreign currency BB-/Negative/B, local currency BB/Negative/B).

"The stable outlook on FCMB balances the bank's increasing credit risk with its sound capitalization and moderate financial performance," added Mr. Pirnie.

The agency said although nonperforming loans (NPLs) and associated provisioning are expected to rise throughout 2009 and into 2010 as the economic downturn continues,"we do not currently expect this to threaten bottom-line earnings or capital. Indeed, capitalization is expected to remain sound in 2009 as risk asset growth slows, despite moderating internal capital generation".

Reacting to the ratings the Group Managing Director, Mr. Ladi Balogun said“the rating and stable outlook is a reflection of our sound capital, strong earnings profile and improving enterprise risk management framework. Last year we got our inaugural international credit rating from Standard &Poor’s and were assigned a B+ rating with a stable outlook. To have the rating re-affirmed and receive a stable outlook when many sovereign and institutional ratings have been downgraded shows our ability to respond positively to the challenging environment and the robustness of our business. We have not been shy of making provisions for underperforming assets as it was inevitable at this time that following the downturn in oil and stock market prices which is now behind us, industry asset quality would certainly deteriorate. Nonetheless, the bank's earnings profile and capitalization was more than adequate to absorb these factors"

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