November 28, 2022

Sterling Bank retains ‘BBB+’ rating with positive outlook

DataPro, the technology-driven credit rating agency (CRA) has affirmed Sterling Bank Plc long-term rating of “BBB+” with a positive outlook for the year 2021/2022.

“The “BBB+”, according to the report, “indicates slight risk. It shows fair financial strength, operating performance and business profile when compared to the standard established by DataPro Limited.”

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“Sterling Bank Plc,” in the report signed by Kehinde Rasheed, Client Services Manager of DataPro said, “has the ability to meet its ongoing obligations, but its financial strength is vulnerable to adverse changes in economic conditions.”

“DataPro Rating Committee approved the rating after assessment of the company’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.

“During the year under review, the bank was able to grow its earnings capacity and profitability. Gross earnings went up from N133.4b (Yr.20) to N139.9b (Yr.21). Also, pre-tax profit increased from N12.2b (Yr.20) to N14.3b (Yr.21).

“The bank also has strong liquidity coverage for the mismatch in the maturity profiles of its deposit and loans, the liquid assets of the bank provide adequate cushion resulting in net liquidity surplus of N63.5b in the long-term.

According to the report, “The rating of Sterling Bank Plc is also supported by its diversified revenue base, experienced management, milestones achieved in the retail business segment, very strong asset quality as well as improved profitability.”

It added, “Sterling Bank Plc had a short-term rating of “A2”, which indicates fair credit quality and adequate capacity for timely payment of financial commitments.”

“DataPro notes that the rating carries a maximum shelf life of 12 calendar months, in line with international best practices. The rating is therefore not an offer to trade in securities nor a substitute for the user’s judgement. It is meant for reference purposes,” the report concluded.