- Moody’s Investors Service, an accomplished and highly respected international ratings agency has further confirmed the resilience of Sterling Bank in Nigeria’s competitive banking sector by assigning a Local and Foreign Currency Issuer and Deposit Ratings of B2 with stable outlook.
- The Agency in a release made available to newsmen, in Lagos, described Sterling Bank as a stable financial institution with solid quality assets, robust Information Technology and strong risk management systems.
- The Agency also assigned a Counterparty Risk Assessment (CRA) of B1(cr)/Not Prime(cr) to the Bank and declared all ratings of the Bank stable.
- While Nigeria’s economy features some institutional and structural weaknesses that could pose challenges to the banks, Sterling Bank, according to Moody’s has also shown strong resilience to shocks and it presents sizable growth opportunities, which will allow the bank to expand steadily.
- The Agency noted that its Baseline Credit Assessment (BCA) also reflects the bank’s solid liability profile.
“The Bank is predominantly deposit funded with a low reliance on more sensitive market funds. Deposits make up 89% of the Bank’s funding sources compared with an average of around 65% for the system” the Agency stated.
- BCAs are the measure of an issuer’s standalone financial strength that describe the probability of a bank defaulting on any of its rated instruments, in the absence of external support. Moody’s ratings also incorporate one-notch uplift from Sterling’s b3 BCA, based on their “assessment of a moderate likelihood of government support in the event of need. Furthermore, provision coverage is good, with loan loss reserves amounting to 98per cent of doubtful credit”.
- Source: Thisday