Moody's upgrades Ecobank Group's outlook to stable, affirms B3 long term issuer ratings

Moody’s Ratings has affirmed the B3 long- and short-term issuer rating of Ecobank Transnational Incorporated (ETI), the credit rating agency said in a statement on Tuesday.

The agency assigns B3 rating for obligations that are deemed to be speculative and subject to high credit risk.

Moody’s in its latest rating action for the group also changed the outlook on the group’s long-term issuer and senior unsecured debt ratings to stable from negative.

“The decision to change the outlook to stable on the long-term issuer and senior unsecured ratings reflects (1) ETI’s resilience financial performance; (2) the higher dividends being upstreamed to ETI resulting in lower double leverage and reduced refinancing risk,” Moody’s said.

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The rating agency added that the change in outlook also indicates “our expectation that the recapitalisation process of Ecobank Nigeria Limited (ENG: 11.7% of group’s assets as of March 2025) will be completed by the end of 2025, with limited impact on the group’s financial fundamentals.”

It expects that the efforts to strengthen the group’s capital base and the actions to cure Ecobank Nigeria’s total capital position (currently below the 10 per cent capital adequacy regulatory minimum) will be completed before the end of the year.

On Tuesday, Fitch Ratings downgraded Ecobank Nigeria’s viability rating to ‘f’ from ‘ccc,’ reflecting the agency’s view that the bank has suffered a material capital shortfall.

Fitch noted that Ecobank Nigeria’s total capital adequacy ratio has been “in breach of the 10% regulatory requirement since 2024 despite extensive regulatory forbearance.”

This month, the group announced the launch of $250 million AT1 qualifying instruments via a private placement of contingent convertible notes.

Ecobank Nigeria hopes to receive a portion of the cash as AT1 capital in the third quarter of 2025 to beef up its capital adequacy.

Moody’s noted Ecobank Nigeria’s ambition to raise $200 million in AT1 capital.

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“We also note that ENG’s recent successful offer to tender $150 million of its February 2026 $300 million notes and consent to remove the capital adequacy ratio covenant from this bond’s terms alleviates risks of an event of default in Nigeria that would trigger cross default at ETI level,” Moody’s said.

The bank, which has been in breach of the covenant since June 2024, has received a waiver until 30 September 2025.

According to the ratings agency, the group’s asset quality has improved in recent years even though that has been pressured by Ecobank Nigeria.