Fitch downsize 3 Ghanaian banks’ practicality rating to ‘CCC’ from ‘B-‘

The Banks are Ecobank Ghana Limited, Guaranty Trust Bank (Ghana) Limited (GTB Ghana), and United Bank for Africa (Ghana) Limited (UBA Ghana).On key drivers of the downsize, Fitch said “The minimization of the three banks’ VRs follows the minimization of Ghana’s Long-Term IDRs as the banks’ independent credit profiles are firmly connected to that of the sovereign. This mirrors the grouping of their activities inside Ghana, solid dependence on sovereign-determined pay, and high openness to the sovereign comparative with capital. The VRs are one indent underneath their ‘ccc+’ inferred VRs, mirroring the working climate/sovereign rating Constraint.”

That’s what it added “The banks have low gross credits/client stores proportions, are primarily financed by homegrown client stores, and hence less inclined to capital flight”, a circumstance that has been ascribed to the cedi’s devaluation and the country’s expansion pace of 31.7%.

Ecobank Ghana’s Shareholder Support Ratings (SSRs) were appraised at ‘ccc+’ and that of GTB Ghana and UBA Ghana at ‘b-‘.

“The Long-Term Issuer Default Rating (IDR) of Ecobank Ghana has hence been downsized to ‘CCC+ from ‘B-‘ while those of GTB Ghana and UBA Ghana have been certified at ‘B-‘. The Outlook on the Long-Term IDRs is Stable,” Fitch noted on its site on August 22, 2022.

The rating organization further noticed that it “has at the same time removed Ecobank Ghana’s appraisals for business reasons and will never again give evaluations and scientific inclusion to Ecobank Ghana.”

Feasibility evaluations measure the likelihood of an organization being good to go inside the following a year.