Stanbic IBTC Holdings Plc and Stanbic IBTC Bank Plc have retained their AAA national ratings by Fitch Ratings, the global leader in credit ratings, reaffirming their strong fundamentals and stability.
The two institutions, in the report issued on Monday, November 27, 2017, recorded AAA(nga) national long term rating, which provides a relative measure of credit worthiness for rated institutions in Nigeria. The AAA national rating is assigned to an institution with the lowest relative risk.
In arriving at the rating for Stanbic IBTC, Fitch took account of the strong parental support from Standard Bank Group, to which Stanbic IBTC Holdings PLC belongs, as the group provides support in such areas as staff training, provision of information technology upgrades and best practice processes as well as strong corporate governance practices.
It said in a statement that, “Stanbic IBTC Holdings PLC’s (SIBTCH) National Ratings are based on potential support from its parent, South Africa’s Standard Bank Group Limited (SBG/Group; BB+/Stable), if required. Our view of institutional support considers SIBTCH’s strategic importance to SBG, high levels of integration between the parent and the subsidiary, as well as SBG’s majority shareholding in SIBTCH (53.2% through Stanbic Africa Holdings Limited).”
Stanbic IBTC Holdings PLC and Stanbic IBTC Bank received similar ratings in 2016 and February 2017 after a thorough examination of its credit process and financial results.
The bank’s diversified loan portfolio was reviewed, with its impact on various sectors of the economy taken into account.
“One of SIBTCH’s main strengths is its diversified earnings. Non-interest income generation is high and underpinned by fees and commissions and trading income. Loan impairment charges are high, but manageable in the context of strong earnings. Costs are well controlled. As a result, profitability metrics are healthy,” Fitch added.
In its report, the rating agency also reviewed the capital adequacy of Stanbic IBTC in compliance with regulations and concluded that it was very strong and compare favourably against peers, Business Post reports.
The Group was certified as having “good funding profile and very good liquidity” as customer deposits grew strongly by 13 percent in the first half of 2017 with the bank rolling out new delivery channels.
“Balance sheet liquidity is underpinned by large volumes of government securities. Additionally, SIBTCH’s loans/deposits ratio at 62% is one of the lowest among peers.”