Sterling Bank retains “BBB+” rating with positive outlook

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

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

DataPro said Sterling Bank Plc can meet ongoing obligations, but its financial strength is vulnerable to adverse changes in economic conditions.

DataPro rating committee approved the rating after an 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.

The statement explained that during the year under review, the bank was able to grow its earnings capacity and profitability.

According to it, gross earnings went up from N133.4b (Yr.20) to N139.9b (Yr.21).

Also, pretax 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, adding that the liquid assets of the bank provide adequate cushion resulting in a net liquidity surplus of N63.5b in the long-term.

The Rating of the bank is also supported by its diversified revenue base, experienced management, milestones achieved in the retail business segment and very strong asset quality, as well as improved profitability.

Sterling Bank 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 practice.

It added that the rating is not an offer to trade in securities nor a substitute for the user’s judgment but meant for reference purposes.