Business

Moody’s reaffirms Sterling Bank’s ratings

Published

8 years ago

May 5, 2016

Moody's reaffirms Sterling Bank’s ratings

Moody’s Investors Service, a leading global rating agency, has re-affirmed the resilience of the Sterling Bank franchise by maintaining the bank’s standalone Baseline Credit Assessment (BCA) ratings of B3.

BCAs are inputs to Moody’s joint-default analysis for ratings on issuers subject to extraordinary government support. It measures the financial strength of issuers subject to extraordinary government support, which can include banks, sub-sovereigns and government-related corporate issuers (GRIs).

It explicitly excludes the likelihood of extraordinary government support in the event that a bailout is required, but does incorporate support as may be necessary for ordinary operations.

The Rating Agency, in a statement made available to newsmen in Lagos, expressed confidence that with its current profile, Sterling Bank will remain resilient in the face of more challenging operating conditions given its adequate capital and liquidity buffers.

The Agency, in the statement, explained further that “Sterling Bank’s B2 deposit ratings continue to incorporate one notch of rating uplift on account of government support as the Bank’s ratings remain lower than the sovereign rating and it’s foreign currency deposit rating is now in line with the lowered foreign currency deposit ceiling of B2”.

Specifically, Moody’s rated Sterling Bank B3 in Adjusted Baseline Credit Assessment; B1 (cr) in Long-Term Counterpart Risk Assessment; B2 in Long-Term Issuer Rating (Local and Foreign Currency); B2 in Long-Term Deposit Rating (Local and Foreign Currency) while the outlook changed to stable.

It would be recalled that the Agency, in a statement in March this year, noted that the ratings of the Bank reflects its “solid asset quality metrics and provision coverage, improvements to its Information Technology (IT) infrastructure and risk management processes as well as its high liquidity buffers and a solid deposit funding base”.

The bank’s Executive Director, Finance & Strategy, Abubakar Suleiman, noted that the reaffirmation of the rating is a testimony of the resilience of the Bank to remain strong and professional despite the challenging operating environment in which it operates.

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