Sterling Bank retains ‘bbb+’ rating with positive outlook
By Onome Amuge
Technology-driven credit rating agency (CRA), DataPro, has affirmed Sterling Bank Plc’s long-term rating of “BBB+” with a positive outlook for the year 2021/2022.
The rating, according to a statement by Kehinde Rasheed, DataPro’s client service manager, indicates slight risk. Rasheed further explained that the rating shows fair financial strength, operating performance and business profile when compared to the standard established by the leading corporate governance and fraud risk management consulting firm.
“Sterling Bank Plc, in our opinion, has the ability to meet its ongoing obligations, but its financial strength is vulnerable to adverse changes in economic conditions,“ the statement said.
According to DataPro, its 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.
The statement noted that during the year under review, Sterling Bank was able to grow its earnings capacity and profitability as gross earnings rose from N133.4 billion in 2020 to N139.9 billion in the closing period of 2021. Pre-tax profit also moved in a positive direction as it increased from N12.2 billion in 2020 to N14.3 billion in 2021.
DataPro also disclosed that Sterling Bank 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 net liquidity surplus of N63.5 billion in the long term.
The statement further said 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 remarked that the rating carries a maximum shelf life of 12 calendar months, in line with international best practice. It concluded that the rating is meant for reference purposes and not an offer to trade in securities nor a substitute for the user’s judgment.