Download Category: Financial Institution

South African Funds Peer Comparison (Sep 2023)

At the time of publication, GCR rated approximately ZAR426 billion of the combined South African short-term interest bearing and money market funds (by funds under management). This segment represents 15.5% of the total South African funds industry (by assets under management) and 50% of South African interest-bearing funds as at 31 March 2023. The following report provides a peer comparison of rated funds, including a snapshot of the ratings factors and some other market related information.
Outlined below is a breakdown of the rated funds using the major components of the Criteria for Fund Ratings, which can be found on the GCR website. Fund ratings (f) are not credit ratings. Therefore, they do not measure the relative ability of a fund to repay principal and/or interest in a timely manner. Rather, Fund ratings indicate an opinion regarding the fund’s ability to preserve the principal value under varying market conditions which may be affected by credit risk, interest rates, and liquidity, as well as other market conditions. The report does not focus on fund performance.

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Wema Bank Plc (Sept 2023)

Wema Bank’s funding and liquidity assessment is a positive rating factor, supported by a relatively stable funding structure and adequate liquidity coverage. As of December 2022, customer deposits registered at NGN1.2 trillion ($2.6 Billion) representing a 25.7% growth over the prior year, largely underpinned by the Bank’s retail penetration. Customer deposits accounted for 92.9% of the funding base as of December 2022 (December 2021: 89.1%) and were largely (52.9%) in low-cost current and savings deposits (December 2021: 42.7%), translating into a moderate cost of funds of 4.2%.

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Letshego Namibia (Sep 2023)

The ratings on Windhoek based Letshego Bank Namibia Limited (LBN or the bank), Letshego Micro Financial Services (Namibia) (Pty) Limited (LMFSN) and Letshego Holdings Namibia Limited (LHN) reflect the strengths and weaknesses of the group.

LBN provides banking services to Namibian residents while LMFSN provides short to medium-term unsecured consumer advances to salaried employees of the public and private sectors. LHN is a non-operating holding company at the apex of the group, providing funding and strategic oversight.

In GCR’s opinion, both LMFSN and LBN operate functions without which will irreparably damage the group/parent franchise. However, in the event the level of importance of either LBN or LMFSN reduces or is viewed weaker, the ratings may be de-linked from the group ACE/ group credit profile. LHN is the holding company of the Namibia Group and operates exclusively in Namibia through its wholly owned subsidiaries LBN and LMFSN. Botswana based Letshego Holdings Limited (LHL) owns 78.46% of LHN, with the remainder being held by private investors and individuals.

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Lasaco Assurance Plc (Sept 2023)

Lasaco's earnings increased considerably in 2022, with net profit after tax registering at a review period high of NGN1.5 billion in 2022 (2021: NGN261 million), which translated to returns on revenue and assets of 14.8% and 1.5% respectively in 2022 (2021: 2.9% and 0.3% respectively). This growth was largely driven by increased premium retention and a relatively lower claims payment during the year. Also supporting earnings in 2022, was better yields on the investment portfolio; therefore, total investment yields strengthened to 8.3% in 2022 (2021: 6.6%).

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Rand Merchant Bank Nigeria Limited (Sept 2023)

RMBN’s risk position is sound and positive to the rating. As of 31 December 2022, gross loans registered at NGN107.2Billion ($239.0 Million) representing a considerable 69.0% growth over the prior year. This growth was largely driven by the extension of additional loans to existing obligors following a change in the single obligor limit (SOL) regulation at the Group level. Sectorial concentration remains high, with the manufacturing and transport and communication sectors accounting for 49.8%, and 29.4% of gross loans respectively as at 31 December 2022.

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Standard Chartered Bank Limited (Sep 2023)

Standard Chartered Bank of Zimbabwe Limited is a fully owned subsidiary of Standard Chartered 'the group.' Its impact on the group's assets and revenues is minimal and lacks significance. Consequently, the bank is not deemed essential or central to the group's operations. This leads to the bank's ratings being determined solely on its independent credit profile. Additionally, we have excluded any potential uplift from group support due to the groups decision to divest its ownership of the Zimbabwean subsidiary. Instead, the bank is in the process of being acquired by FBC Holdings Zimbabwe on a going concern basis.

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Fidelity Bank Ghana Limited (Aug 2023)

The ratings of Fidelity Bank Ghana Limited (FBL Ghana) are based on the credit profile of the consolidated Fidelity Limited (the Group) as the bank conducts a critical role and is a significant part of the Group accounted 100.0% of loans and advances. The Group is owned by institutional investors and individuals.

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First Capital Bank Zimbabwe Limited (Aug 2023)

The bank is a majority owned subsidiary of the ultimate parent company FMBcapital Holdings PLC and is not a material asset or revenue contributor. As a result, the analysis was based on a mixture of the bank’s standalone credit analysis and group support characteristics.

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East African Development Bank (Aug 2023)

East African Development Bank was created under the Treaty for the East African Co-operation of 1967, which was subsequently amended and re-enacted as the Treaty and Charter of the East African Development Bank (The Charter) in 1980 with its current membership comprising the four East African Countries of Uganda, Kenya, Tanzania and Rwanda with its head office in Kampala, Uganda. The bank is primarily involved in development finance lending and the provision of related services as stipulated under its Charter.

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Nova Merchant Bank Limited (Aug 2023)

Nova Merchant Bank Limited (Nova MB or the bank) was incorporated on 17 May 2017 and commenced operations on 1 February 2018. The bank provides corporate and investment banking services, money market operations, wealth management and advisory services to high-net-worth individuals, public and private businesses. Nova MB has two Securities and Exchange Commission (SEC) regulated, wholly owned subsidiaries namely: Nova MBL Asset Management Limited and Nova MBL Securities Limited that provide fund management and stockbroking services respectively. In assigning the rating, GCR has adopted a Group credit analysis approach.

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