Fitch gives Stanbic positive credit rating

Fitch, an international credit rating agency has affirmed Stanbic’s long-term issuer default rating at B+ while it maintained its ‘AAA’ rating in Uganda.

The ratings simply mean the bank has the lowest expectation from the agency to default on any payments of financial commitments in Uganda.

Stanbic is the largest bank by both assets and profitability in the banking sector.

“We welcome the positive rating by Fitch which speaks to the stability of our business and ability to support Uganda’s economic growth in a challenging operating environment,” Anne Juuko, the Stanbic chief executive said in a statement.

“The stable outlook reflects our view that Stanbic creditworthiness compared to other domestic issuers is unlikely to change over a one to two-year period. Stanbic’s profitability is expected to further recover in 2022 resulting from a likely rise in Uganda’s interest rates and stronger loan growth,” she added.

Stanbic's net profits grew by 11% as at end of December 2021 pegged largely to diversity in the bank’s revenue streams and good credit risk management for the period.

Customer deposits—money that clients trust with the bank for safe custody grew by 5% to sh5.7 trillion. Total loans and advances to borrowers grew by 3% or sh104b during the period.

The bank’s non-performing loans (NPLs) dropped to 4.6% from 4.7% the previous year and saw provision reduce to sh70b from sh92b in 2020.

Operating costs increased by 14% or sh61b to sh482b in 2021. This was attributed to continued investment in infrastructure to enhance the bank’s digital capabilities and other operational loss provisions.

Source: New Vision