GCR affirms Sterling Bank’s credit rating

An international rating agency- Global Credit Ratings (GCR), 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 stable.

This rating, valid till 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 the 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 in Lagos, at the weekend, attributed the rating to the lender’s strong performance and resilience amid challenging operating conditions.

“Sterling’s total assets amounted to N796.4 billion, representing a market share of 2.8% at financial year 2015. The bank’s capital base grew 12.2% in 2015, solely through internal capital generation, with the risk weighted capital adequacy ratio improving to 17.5% in 2015 against 14% in 2014.

“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,” the agency stated.

Notwithstanding the 100 basis points contraction recorded in net interest margin, Sterling Bank, according to the agency, reported a net profit after tax of N10.3 billion for 2015, an improvement of 14.4% over F14.

“Performance was supported by non-interest income which grew 13.8% to N29.3 billion (buoyed by growth in trading securities). Further, total operating expense line declined 1.9% to N49.7 billion, resulting in a reduction of the cost ratio to 72.2% from 73.6% in 2014.”