GCR Ratings (“GCR”) has upgraded the national scale long term rating assigned to Stanbic IBTC Bank PLC to AA+(NG) from AA(NG) and affirmed the national scale short term rating at A1+(NG), with a Stable Outlook.
The rating upgrade is underpinned by Stanbic IBTC’s sound competitive position, and resilient financial profile amidst the strains in the operating environment.
Further supporting the rating is the robust financial and technical support from its ultimate parent, Standard Bank Group (“SBG”), the largest banking group in Africa in terms of balance sheet size and earnings.
Leveraging its membership of the Group, the bank continues to harness inherent cross selling opportunities to serve a wide range of customers and ultimately enhance its financial performance and market position.
Furthermore, the improved value propositions, sustained investment in information technology, as well as retail penetration strategy have seen the relatively cheaper and stable current and savings deposits increase consistently over the review period, thereby leading to 140bps moderation in cost of funds to 2.5 percent at FY20.
The bank also evidenced good revenue growth and robust return on equity and assets over the last five years. Management & Governance is a neutral ratings factor.
Stanbic IBTC is adequately capitalized, with a capital adequacy ratio consistently maintained well above the regulatory minimum of 10 percent over the review period.
Similarly, GCR’s computed core capital ratio is considered robust at 25.1 percent at 1Q FY21 (FY20: 24.1 percent) largely supported by strong earnings accretions over the years.
