By Barnabas Esiet.
Credit rating agency DataPro has highlighted the growing impact of operational risks on corporate credit ratings, noting that strong financial performance alone may not guarantee a favourable credit assessment.
In a report titled “Impact of Operational Risk on Credit Rating,” the agency said that while revenue, profitability, liquidity, and debt repayment capacity remain key rating considerations, operational weaknesses can create future financial pressures capable of undermining an issuer’s creditworthiness.
DataPro identified weak governance and internal controls, technology and cybersecurity vulnerabilities, regulatory non-compliance, human capital challenges, and infrastructure-related disruptions as major operational risks considered during credit rating assessments.
According to the agency, governance failures, poor risk management frameworks, and inadequate internal controls can increase exposure to fraud, compliance breaches, and operational inefficiencies.
It also noted that as businesses become more reliant on technology, cyberattacks, system failures, and service disruptions have become increasingly important factors in evaluating operational resilience.
The report further stressed that repeated regulatory breaches, high employee turnover, poor succession planning, and overdependence on key personnel can weaken an organisation’s operational stability and negatively affect its credit profile.
DataPro observed that operational risks are particularly significant in emerging markets such as Nigeria, where challenges such as unstable power supply, transportation bottlenecks, and disruptions to critical infrastructure can affect business continuity.
The agency warned that operational failures often translate into financial consequences, including declining revenues, higher operating costs, weaker cash flows, reputational damage, regulatory penalties, and increased refinancing pressure, all of which can impair a company’s ability to meet debt obligations.
It added that the increasing pace of digitalisation, stricter regulatory expectations, and heightened stakeholder scrutiny have made operational resilience a critical component of credit quality.
As a result, many companies are investing in cybersecurity, enterprise risk management, governance improvements, staff development, and business continuity planning to strengthen both operational stability and creditworthiness.
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