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FHA Mortgage Bank Gets “BBB” Rating
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DataPro, a technology-driven credit rating agency has assigned FHA Mortgage BankLimited a long-term rating of “BBB” with astable outlook for the year 2021/2022.
A statement by the Client Services Manager of DataPro, Mr. Kehinde Rasheed, explained that the “BBB” rating indicates slight risk and that it shows fairfinancial strength, operating performance, and business profile when comparedto the standard established by DataPro.
Although the rating agency was confident in FHA Mortgage Bank’s capacity to meet its financial obligations, it, however, noted the vulnerability of the bank to unfavourable economic conditions, saying “This Company, in our opinion, has the ability to meet its ongoing obligations, but its financial strength is vulnerable to adverse changes in economic conditions.
The statement added that the DataPro Rating Committee approved the rating after an assessment of the mortgage firm’s financial performance, capital adequacy, asset quality,liquidity, profitability, corporate governance, and risk management as well as risk factors of its current healthy profile in the medium to long-term period.
“The bank generated earnings from interest and non-interest sources which contributed 38 per cent growth in gross earnings during the year 2020.
“The bank’s operating expenses also grew marginally by three per cent from N469million (Yr. 19) to N481million (Yr. 20),” the statement said.
According to DataPro, the rating of FHA Mortgage Bank Limited is supported by thebank’s leverage on the capacity of its parent body
DataPro notes that the rating carries a maximum shelf life of 12 calendar months, in line with international best practices. It, however, explained that the rating is not an offer to trade in securities nor a substitute for the user’s judgment, saying it is meant for reference purposes.