Announcements Financial Institutions Rating Alerts

GCR Affirms Stanbic IBTC Bank PLC SNP Series 1 (Tranche A and Tranche B) Notes Ratings of A(NG)

Lagos, 03 December 2018–Global Credit Ratings has affirmed the national scale long-term credit ratings of A(NG) accorded to the Series 1 (Tranche A and Tranche B) Notes issued under Stanbic IBTC Bank PLC’s (“Stanbic IBTC” or “the bank” or “the Issuer”) N150bn Structured Note Programme (“SNP”); with a Stable Outlook. The ratings are valid until September 2019.

· Series 1 (Tranche A) N100.0m 10-year Subordinated Notes, issued September 2014.
· Series 1 (Tranche B) N15.44bn 10-year Subordinated Notes, issued September 2014.

RATING RATIONALE

Global Credit Ratings has accorded the above final credit ratings based on the following key criteria:

The ratings reflect the unsecured and subordinated nature of the Series 1 (Tranche A and Tranche B) Notes, ranking after all senior indebtedness and the claims of depositors of the Issuer. As such, the accorded ratings are 2 notches lower than the Issuer’s national scale long-term rating of AA-(NG).

Stanbic IBTC is a mid-sized player in Nigeria, wholly owned subsidiary by Stanbic IBTC Holdings PLC (“the Holdco” or “the group”), a member of the Standard Bank Group (“SBG”). The group’s key rating strength is the implied financial and technical support from its ultimate parent, SBG (the largest banking group in Africa based on balance sheet size and earnings).

Stanbic IBTC registered an after tax profit of N28.8bn in FY17, representing a notable 91.9% year-on-year growth and yielding an improved ROaE and ROaA of 23.3% and 2.6% in FY17 (FY16: 14.7% and 1.6%) respectively. 1H FY18 performance was ahead of budget, with pre-tax profit registering an annualised growth of 156.8%. While net interest income lagged budget, the variance was more than offset by favourable variance in non-funded revenue. Modest increase in operating expenses, coupled with recoveries from bad debts (totalling N5.5bn), further supported bottom line performance.

Liquidity is maintained at good levels, with the cash & liquid assets/ total short-term funding ratio standing at 59.7% at 1H FY18, while the statutory liquidity ratio was maintained at above 83.1%.

Per the quarterly performance reports provided by the Trustee to the Noteholders, in the period to 30 September 2018, the Issuer has met all its obligations under the Series 1 Issuance on a timely basis.

The accorded ratings would be sensitive to a positive rating action on the Issuer. Non-compliance with the set covenants or a downgrade in the Issuer’s rating could trigger a negative rating action.

NATIONAL SCALE RATINGS HISTORY
Series 1(Tranche A) Series 1(Tranche B)
Initial rating (July 2014) Initial rating (July 2014)
Long Term: A(NG) Long Term: A(NG)
Outlook: Positive Outlook: Positive

Last rating (October 2017) Last rating (October 2017)
Long Term: A(NG) Long Term: A(NG)
Outlook: Stable Outlook: Stable

ANALYTICAL CONTACTS

Primary Analyst
Julius Adekeye
+23 41 904 9462-3
adekeye@globalratings.net

Committee Chairperson
Dave King
king@globalratings.net

APPLICABLE METHODOLOGIES AND RELATED RESEARCH

Global Criteria for Rating Banks and Other Financial Institutions, updated March 2017
Previous Issue rating reports (2014-17)
Issuer rating reports, up to 2018
Glossary of Terms/Ratios (February 2016)

RATING LIMITATIONS AND DISCLAIMERS

ALL GCR’S CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://GLOBALRATINGS.COM.NG/UNDERSTANDING-RATINGS. IN ADDITION, GCR’S RATING SCALES AND DEFINITIONS ARE ALSO AVAILABLE FOR DOWNLOAD AT THE FOLLOWING LINK: HTTP://GLOBALRATINGS.COM.NG/RATINGS-INFO/RATING-SCALES-DEFINITIONS. GCR’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, PUBLICATION TERMS AND CONDITIONS AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE AT HTTP://GLOBALRATINGS.COM.NG.

SALIENT FEATURES OF ACCORDED RATINGS

GCR affirms that a.) no part of the rating was influenced by any other business activities of the credit rating agency; b.) the rating was based solely on the merits of the rated entity, security or financial instrument; c.) such rating was an independent evaluation of the risks and merits of the rated entity, security or financial instrument; and d.) the validity of the rating is for 12 months, or as indicated by the applicable credit rating document.

The ratings were solicited by, or on behalf of Stanbic IBTC Bank PLC, and therefore, GCR has been compensated for the provision of the ratings.

Stanbic IBTC Bank PLC participated in the rating process via face-to-face management meetings, teleconferences and other written correspondence. Furthermore, the quality of info received was considered adequate and has been independently verified where possible.

The credit ratings above were disclosed to Stanbic IBTC Bank PLC with no contestation of/changes to the ratings.

The information received from Stanbic IBTC Bank PLC and United Capital Trustees Limited to accord the credit ratings included the Issuer’s 31 December 2017 audited financial statements, audited interim accounts for the six month period to 30 June 2018, Trustees’ performance reports up to September 2018, the Master Trust Deed for the Structured Note Programme, the Programme Shelf Prospectus, the Series 1 (Tranche A and Tranche B) Trust Deeds, as well as the relevant Supplemental Shelf Prospectuses.

image_pdfPDF View


ALL GCR CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS, TERMS OF USE OF SUCH RATINGS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS, TERMS OF USE AND DISCLAIMERS BY FOLLOWING THIS LINK:HTTP://GCRRATINGS.COM. IN ADDITION, RATING SCALES AND DEFINITIONS ARE AVAILABLE ON GCR’S PUBLIC WEB SITE AT WWW.GCRRATINGS.COM/RATING_INFORMATION. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. GCR's CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THIS SITE.

CREDIT RATINGS ISSUED AND RESEARCH PUBLICATIONS PUBLISHED BY GCR, ARE GCR’S OPINIONS, AS AT THE DATE OF ISSUE OR PUBLICATION THEREOF, OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. GCR DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL AND/OR FINANCIAL OBLIGATIONS AS THEY BECOME DUE. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: FRAUD, MARKET LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND GCR’S OPINIONS INCLUDED IN GCR’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. CREDIT RATINGS AND GCR’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND GCR’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL OR HOLD PARTICULAR SECURITIES. NEITHER GCR’S CREDIT RATINGS, NOR ITS PUBLICATIONS, COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. GCR ISSUES ITS CREDIT RATINGS AND PUBLISHES GCR’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING OR SALE.

Copyright © 2021 GCR INFORMATION PUBLISHED BY GCR MAY NOT BE COPIED OR OTHERWISE REPRODUCED OR DISCLOSED, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT GCR’S PRIOR WRITTEN CONSENT. Credit ratings are solicited by, or on behalf of, the issuer of the instrument in respect of which the rating is issued, and GCR is compensated for the provision of these ratings. Information sources used to prepare the ratings are set out in each credit rating report and/or rating notification and include the following: parties involved in the ratings and public information. All information used to prepare the ratings is obtained by GCR from sources reasonably believed by it to be accurate and reliable. Although GCR will at all times use its best efforts and practices to ensure that the information it relies on is accurate at the time, GCR does not provide any warranty in respect of, nor is it otherwise responsible for, the accurateness of such information.GCR adopts all reasonable measures to ensure that the information it uses in assigning a credit rating is of sufficient quality and that such information is obtained from sources that GCR, acting reasonably, considers to be reliable, including, when appropriate, independent third-party sources. However, GCR cannot in every instance independently verify or validate information received in the rating process. Under no circumstances shall GCR have any liability to any person or entity for (a) any loss or damage suffered by such person or entity caused by, resulting from, or relating to, any error made by GCR, whether negligently (including gross negligence) or otherwise, or other circumstance or contingency outside the control of GCR or any of its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct, indirect, special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profits) suffered by such person or entity, as a result of the use of or inability to use any such information. The ratings, financial reporting analysis, projections, and other observations, if any, constituting part of the information contained in each credit rating report and/or rating notification are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities. Each user of the information contained in each credit rating report and/or rating notification must make its own study and evaluation of each security it may consider purchasing, holding or selling. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY GCR IN ANY FORM OR MANNER WHATSOEVER.