The two institutions, according to the ratings release, have the ability to meet their financial commitments as they fall due. The national rating provides a relative measure of credit worthiness for rated institutions in Nigeria and 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.
“SIBTC's and SIBTCH's National Ratings are based on the probability of support from their parent, Standard Bank Group Limited (SBG). SBG has a majority 53.2% stake in SIBTCH, which owns 100% of SIBTC. Fitch believes SBG's support would extend equally to both the bank and the holding company,” the report said.
Stanbic IBTC was given a similar rating in 2016 after a thorough examination of its credit process and financial results. The institution’s diversified loan portfolio was reviewed, with its impact on various sectors of the economy taken into account. Among economic sectors impacted by the bank were agriculture, construction, real estate and infrastructure; electricity and other utilities; consumer credit; manufacturing; oil and gas and general commerce. Others were downstream oil and gas, transportation and communication, among others.
In its report, the rating agency also reviewed the capital adequacy of Stanbic IBTC in compliance with regulations and concluded that it was adequately capitalised with capital adequacy ratio well above the regulatory benchmark. The liquidity position of Stanbic IBTC was reviewed and its ability to meet foreign currency obligations as they fall due. The Group was certified as having adequate liquidity to meet both its short and long term obligations.
Chief Executive of Stanbic IBTC Holdings, Mr. Yinka Sanni, said the ratings reflect the financial institution’s strength, strong leadership and unyielding support of its parent company. He reiterated Stanbic IBTC’s commitment to the Nigerian market and pledged it will continue to provide support to all sectors of the economy in moving individuals and businesses forward. “We are elated by this validation of our strength. This will help to boost our drive to build a strong end-to-end financial solutions institution that offers bespoke products and services to our clientele. Our commitment to supporting the attainment of Nigeria’s developmental aspirations remains unwavering,” Sanni said.
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