GCR Affirms Sterling Bank’s BBB Rating, Outlook Stable
Global Credit Ratings (GCR), an international rating agency at the weekend, affirmed Sterling Bank Plc’s national long term and short term ratings of BBB(NG) and A3(NG) respectively, with the outlook accorded as stable.
This rating which is valid until July 2017 comes after another global ratings agency, Moody’s Investors Service, affirmed the Bank’s local and foreign currency issuer ratings of B2 with stable outlook.
Moody’s had described Sterling Bank as a stable financial institution with solid asset quality, robust Information Technology and risk management processes, and high liquidity buffers. The Agency also assigned a Counterparty Risk Assessment (CRA) of B1(cr)/Not Prime(cr) to the Bank with stable outlook.
GCR in a report made available to newsmen by Sterling Bank in Lagos at the weekend attributed the Bank’s rating to its strong performance and resilience amidst challenging operating conditions.
Part of the GCR Report reads: “Sterling’s total assets amounted to N796.4bn (representing a market share of 2.8%) at FYE15. The bank’s capital base grew 12.2% in FYE15, solely through internal capital generation, with the risk weighted capital adequacy ratio (“RWCAR”) improving to 17.5% at FYE15 (FYE14: 14.0%). To further strengthen its capital base and support asset growth, the bank is in the process of raising up to N35 billion Tier II capital expected to be concluded in the third quarter of FYE 16”.
Notwithstanding the 100 basis points contraction recorded in net interest margin, Sterling Bank, according to the Agency, reported a net profit after tax (“NPAT”) of N10.3bn for FYE15, an improvement of 14.4% over F14.
“Performance was supported by non-interest income which grew 13.8% to N29.3bn (buoyed by growth in trading securities). Further, total operating expense line declined 1.9% to N49.7bn, resulting in a reduction of the cost ratio to 72.2% from 73.6% in FYE14.” According to the Agency, the Bank’s gross NPL ratio ended at 4.8% in F15, which was below peer average of 6.1% and regulatory limit of 5%.
While commending Sterling Bank for composing its Board of Directors in line with the provisions of the Central Bank of Nigeria ’s (CBN) Code of Corporate Governance for Banks in Nigeria and the Securities and Exchange Commission’s (“SEC”), code for publickly quoted companies, GCR also lauded the Bank for maintaining a diversified funding base, consisting mainly of customer deposits (both retail and corporate).
GCR also noted that Sterling Bank has continued to improve on its service delivery to customers through various strategic initiatives.
Sterling Bank Plc, “the one-customer bank”, is a full-service national commercial bank with an asset base above N800 billion with over 187 business offices and more than 800 ATMs nationwide. In over 55 years of service, Sterling Bank (formerly NAL Bank) has evolved from the nation’s pre-eminent investment banking institution to a fully-fledged commercial bank. Furthermore, with a strong national presence, Sterling Bank is one of the top 30 most capitalized institutions on the Nigerian Stock Exchange.
The bank is also one of Nigeria’s fastest growing banks and is recognized as a dynamic financial services organization.