Zenith Bank Falls to Two-Week Low on Standard & Poor’s Outlook – Zenith Bank Plc, Nigeria’s second- biggest lender by market value, fell the most in two weeks after Standard & Poor’s Ratings Services said it expects “earnings to remain under pressure” in 2010. The shares fell as much as 4.3 percent and were trading 2.9 percent lower at 13.20 naira as of 11:22 a.m. in Lagos, the steepest intraday drop since Dec. 22.
The negative outlook on Zenith, which has a B+ credit rating, or four notches below investment grade, “reflects the weakened financial profile of the Nigerian banking sector, and Standard & Poor’s view that asset quality could potentially deteriorate further, given economic uncertainty and the lagged effects of the downturn this year,” S&P said in a Dec. 31 statement.
The ratings agency will consider revising the outlook to stable if the bank “is able to minimize any further deterioration in the loan book, maintain good capital and comfortable liquid asset cushions and keep profitability resilient.”