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Credit Rating Agencies in Nigeria (Reviewed, 13th Sept 2001) Tell your friends about this page! Email it to them.

Agusto & Company            CMC International  (both on this page)

Financial institutions in Nigeria are in their developmental stage. The democratic wave that began in May 29, 1999 gave a lot of impetus to previously obscure or non-existence sub-sectors in the financial sector to come to the surface. One of such sub-sector is the Credit Rating and Business Information Services.

Credit Rating (CR) simply refers to a short-term assessment of liabilities of financial institutions to estimate their risk ratings. Credit Rating Report (CRR) on the other hand refers to a report either solicited or unsolicited that assesses the financial condition and obligatory capacity of an organization or group of organizations in the same sector or sometimes in different sectors of the economy.

Obtaining information relating to agencies that render this important service in Nigeria is quite daunting. Though one company that seems to have become the recurring decimal in this field in Nigeria with experience and tremendous goodwill on its side is Agusto & Company.

Investigations carried out shows a number of inhibiting factors that hinder the development of this sector in Nigeria in contrast to their counterparts abroad like FISH, Standard & Poor among others. Few of such factors are:

i. Lack of qualified and experienced experts in this highly technical field.

ii. Reluctance of many companies in the Nigerian capital market of being rated.

iii. The long-term prospect of such an agency in terms of carving a reputation for itself in the sector.

From all indications the sector needs to surmount a number of mountains as challenges before it can enjoy a level of relevancy in the Nigerian economic space, among these obstacles are:

I. The need to educate individuals and companies alike in the Nigerian economy of the value of credit rating especially in terms of getting local and foreign investors interested in their companies.

II. The development and internalisation of high ethical standard for operators in this sub-sector for critical and unbiased ratings and analysis of company liabilities.

III. The need for the government and the private sector to promote and encourage through incentives, the proliferation of more agencies into this sector.

Basically, there are two Credit Rating Agencies in Nigeria, although it was purported that two other agencies – West Africa Rating and Pharez – exists but their locations could not be traced at the point of writing this piece. These are Agusto & Co. and CMC International.

AGUSTO & CO. LIMITED

From all indications this company is a pioneer in this field. Incorporated in Nigeria in January 1992 as a private limited liability company with an authorized capital of fifty million Naira (N50 million). Its ownership structure shows a closely knitted private company that has 20% shares owned by friends and relatives, 19% by past and present employees and the majority shares 61% controlled by the duo Olabode M. Agusto and Cyril Chukwumah, both directors.

At the commencement of business operation in 1992, the company concentrated on unsolicited assessments of the liabilities of financial institutions. But, by 1997 with a respectable niche carved for itself, they embarked on solicited ratings, which according to them pay the bills. 

BUSINESS FOCUS

  1.  RESEARCH
  •  The Environment (Economic & Political)
  •  Key Industries
  •  Key Businesses
  •  The Markets
  1.  CREDIT RATINGS
  •  Banks
  •  Corporates
  1.  FINANCIAL TRAINING
  •  Accounting & Financial Analysis
  •  Credit Analysis
  •  Banking Operations
  •  Treasury Skills
  •  Industry Seminars
  1.  CLIENT SPECIFIC RESEARCH

PRODUCT FOCUS

  1.  ACCESS TO DATABASE
  •  Right to use information on our database.
  1.  RESEARCH PUBLICATIONS
  •  Banking Industry Report
  •  Insurance Industry Report
  •  Credit Rating Reports
  •  Industry Reports on the key sectors of each economy.
  1.  CREDIT RATINGS
  •  Credit Ratings (Banks)
  •  Credit Ratings (Corporates)

MISSION STATEMENT

Its Mission Statement states that: "Our business is to provide timely and relevant information to our clients on key economies in West Africa." This information covers: -

  •  The environment (economic and political)
  •  Key industries
  •  Key obligors
  •  The markets (money, stock, foreign exchange).

The Company also uses the knowledge acquired to provide superior services to its clients in the following areas:

  •  Credit Ratings
  •  Client Specific Research
  •  Financial Training.

THE COMPANY’S CORE VALUES

i. Character

ii. Deep knowledge of each economy we work in

iii. Independence and impartiality of mind

iv. Confidentiality

v. Transparency

vi. Adequate and high quality analysts

vii. Sound financial condition. 

ITS VISION

 To be the foremost business information company in West Africa. 

ITS STRATEGIC GOALS

  •  To be an international business information company.
  •  To provide business information on the key economies in West Africa.
  •  To allow the needs of our customers drive the products which we sell.
  •  Provide professionally and financially rewarding careers to our staff.
  •  Generate competitive annuity income for our shareholders.

LATEST RATINGS BY AGUSTO & CO.

CREDIT RATINGS SUMMARY

FINANCIAL INSTITUTIONS

BANK

RATING

EXPIRY

ANALYST

 

 

 

Citibank Nigeria

Aaa

30-June-2001

Vivien Shobo

Zenith International Bank Ltd

Aaa

30-Oct-2001

Yinka Adelekan

Diamond Bank Ltd

Aa

30-Sep-2001

Yinka Adelekan

Guaranty Trust Bank Plc

Aa

31-Jul-2001

Lolade Ogunjimi

Investment Banking & Trust Company Ltd

Aa

31-Aug-2001

Lolade Ogunjimi

Equitorial Trust Bank Limited

A

30-Nov-2001

Lolade Ogunjimi

FBN (Merchant Bankers) Ltd

A

31-Aug-2001

Vivien Shobo

First City Merchant Bank Ltd

A

30-June-2001

Taiwo Kasali

Habib Nigeria Bank Ltd

A

30-June-2001

Taiwo Kasali

Indo-Nigerian Merchant Bank Ltd

A

31-Aug-2001

Yinka Adelekan

Lead Merchant Bank Ltd

A

31-Aug-2001

Taiwo Kasali

Marina International Bank Ltd

A

30-Nov-2001

Taiwo Kasali

Union Bank of Nigeria Plc

A

30-June-2001

Yinka Adelekan

United Bank for Africa Plc

A

31-Aug-2001

Vivien Shobo

Universal Trust Bank Plc

A

31-Aug-2001

Taiwo Kasali

Chartered Bank Plc

Bbb

31-Aug-2001

Lolade Ogunjimi

Commercial Bank (Credit Lyonnais) Limited

Bbb

30-June-2001

Lolade Ogunjimi

Co-operative Development Bank Plc

Bbb

30-June-2001

Lolade Ogunjimi

Devcom Merchant Bank Ltd

Bbb

31-Aug-2001

Lolade Ogunjimi

Equity Bank of Nigeria Ltd

Bbb

30-June-2001

Isaac Babatunde

Gulf Bank of Nigeria Plc

Bbb

31-Aug-2001

Taiwo Kasali

Intercontinental Bank Ltd

Bbb

30-June-2001

Taiwo Kasali

Magnum Trust Bank Plc

Bbb

31-Jul-2001

Isaac Babatunde

Manny Bank Nigeria Plc

Bbb

31-Aug-2001

Yinka Adelekan

Prudent Bank Plc

Bbb

31-Aug-2001

Isaac Babatunde

Oceanic Bank International (Nig) Limited

Bbb

31-Mar-2002

Taiwo Kasali

Stanbic Merchant Bank Ltd

Bbb

30-June-2001

Isaac Babatunde

Trust Bank of Africa Limited (Merchant Bankers)

Bbb

30-June-2001

Isaac Babatunde

Wema Bank Ltd

Bbb

31-Aug-2001

Taiwo Kasali

Citizens International Bank Limited

Bb+

31-Aug-2001

Yinka Adelekan

Hallmark Bank of Nigeria Plc

Bb+

30-Sep-2001

Isaac Babatunde

DISCOUNT HOUSES

RATING

EXPIRY

ANALYST

 

 

 

Consolidated Discount Ltd

Aa

30-Sep-2001

Isaac Babatunde

First Securities Discount House Ltd

Aa

30-Nov-2001

Taiwo Kasali

Kakawa Discount House Ltd

Aa

30-Nov-2001

Lolade Ogunjimi

Express Discount Ltd

Bbb

30-Sep-2001

Yinka Adelekan

 Six banks have elected not to publish their ratings 

RATING DEFINITION

An Agusto & Co. credit rating is a current assessment of the financial condition of a financial institution and capacity to meet its local currency obligations as and when due.

DEFINITION OF RATINGS (By Agusto & Co.)

Aaa - A financial institution of impeccable financial condition and overwhelming capacity to meet obligations as and when they fall due. Adverse changes in the environment (macro-economic, political and regulatory) are unlikely to lead to a deterioration in financial condition or an impairment of the ability to meet its obligations as and when they fall due. In our opinion, regulatory and/or shareholder support will be obtained, if required. Typically, a financial institution in this category will score more than 89% on our scoring grid.

 Aa - A financial institution of very good financial condition and strong capacity to meet its obligations as and when they fall due. Adverse changes in the environment (macro-economic, political and regulatory) will result in a slight increase the risk attributable to an exposure to this financial institution. However, financial condition and ability to meet obligations as and when they fall due should remain strong. Although regulatory support is not assured, shareholder support will be obtained, if required. Typically, a financial institution in this category will score 80% to 89% on our scoring grid. 

A - A financial institution of good financial condition and strong capacity to meet its obligations. Adverse changes in the environment (macro-economic, political and regulatory) will result in a medium increase in the risk attributable to an exposure to this financial institution. However, financial condition and ability to meet obligations as and when they fall due should remain largely unchanged. In Agusto's opinion, shareholder support should be obtainable, if required. Typically, a financial institution in this category will score 70% to 79% on our scoring grid. 

Bbb - A financial institution of satisfactory financial condition and adequate capacity to meet its obligations as and when they fall due. It may have one major weakness which, if addressed, should not impair its ability to meet obligations as and when due. Adverse changes in the environment (macro-economic, political and regulatory) will result in a medium increase in the risk attributable to an exposure to this financial institution. Although capacity to meet obligations is adequate, in Agusto's opinion, shareholder support is not assured, if required. Typically, a financial institution in this category will score 60% to 69% on our scoring grid. 

Bb - Financial condition is satisfactory and ability to meet obligations as and when they fall due exists. May have one or more major weaknesses. Adverse changes in the environment (macro-economic, political and regulatory) will increase risk significantly. In our opinion, shareholder support is not assured, if required. Typically, a financial institution in this category will score 50% to 59% on our scoring grid. 

B - Financial condition is weak but obligations are still being met as and when they fall due. Has more than one major weakness and may require external support which, in our opinion, is not assured. Adverse changes in the environment (macro-economic, political and regulatory) will increase risk significantly. Typically, a financial institution in this category will score 40% to 49% on our scoring grid. 

C - Financial condition is very weak. Net worth is likely to be negative and obligations may already be in default. A financial institution in this category will score less than 40% on our scoring grid. 

D - In default. 

A + (plus) or - (minus) may be added to a rating. A plus added to a rating indicates that the rating may be raised. A minus means that the rating may be lowered. When no plus/minus is added to the rating, this means that the rating is unlikely to change. A positive or negative added to a rating is therefore a reflection of the rating outlook.

ENQUIRIES

Please contact Vivien Shobo on + 234 1 2643575 for subscription requests. Also contact the individual analysts for information or further clarifications on the financial institutions rated by them on telephone numbers +234 1 2643571-4.

DISCLAIMER

The information contained in this document has been obtained from published financial statements and other sources which we consider to be reliable but do not guarantee as such. The opinions expressed in this document do not represent investment or other advice and should therefore not be construed as such.

Agusto & Co. Limited disclaims liability for any direct or consequential loss arising from reliance on the information contained in this document.

Agusto & Co. have two related parties; Alliance Consulting and IBFC Agusto Limited with the latter handling their training services. A close examination of the company reveals a team of seasoned professionals with an experienced Chartered Accountant at the helms of affairs as the Managing Director and active partner in the person of Olabode Agusto. In a bid to broaden there horizon they are proposing to enter a partnership agreement with FISH and the World Banks’ ISC.

CONTACT INFORMATION

Contact Officers: MR. OLABODE AGUSTO

MANAGING DIRECTOR

+234(0) 803-304-7463 DL

MRS. VIVIEN SHOBO

HEAD, RATINGS

+234(0) 803-304-7391 DL

MRS. LOLADE OGUNJIMI

HEAD, BUSINESS INFORMATION

+234(0) 803-307-4218 DL

[email protected]

Office address: UBA House (5th Floor)

57 Marina, Lagos.

Postal Address: P. O. BOX 56136, Ikoyi,

Lagos, Nigeria.

Telephone: +234-1-264-3571-5 

Fax: +234-1-264-3576

E-mail: [email protected]

Website: www.agusto.com 

 

CMC INTERNATIONAL

This is a relatively young business organization that combines confidential credit and business information services. It boasts of an array of distinguished and seasoned business gurus on its board and was incorporated in Nigeria in 1999 as private limited liability company. With barely two years of operation the company is acknowledged for its objective financial health analysis and quality credit and financial management support services.

SERVICES

  •  CREDIT INFORMATION SERVICES
  •  CMC CREDIT RATING (CCR)
  •  CMC DUE DILIGENGE REPORT (DDR)
  •  CREDIT OUTSOURCING
  •  COMPANY PROFILE REPORT (CPR)
  •  TRADE OPPORTUNITY REPORT (TOR)
  •  CRDIT SURVEILLANCE SERVICES (CSS)
  •  OTHER RELATED SERVICES IN EXPORT – IMPORT CREDIT GUARANTEE SCENARIO

The company is currently working for several leading banks in Nigeria including Nigeria Deposit Insurance Corporation (NDIC) and three foreign credit and business information organizations namely: Dun & Bradstreet, UK, ICC Information, UK and TCM Group International, Australia. Their credit rating services are mainly based on solicited requests by their clients, which are operated independently and treated with utmost confidentiality.

BASIC INFORMATION

Contact Officers: DR. CHRIS M. E. ONALO

MANAGING DIRECTOR/CEO

+234-1-2645845

Office Address: 6 Ajele Street, Lagos.

Postal Address: P. O. BOX 2708, Apapa, Lagos, Nigeria.

Telephone: +234-1-2645845-7

Fax: +234-1-2645844

E-mail: [email protected]

Website: www.cmcint.com

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