As a confirmation of Stanbic’s financial strength, Fitch Ratings, one of the world’s top three Credit rating agencies has assigned Stanbic Bank Uganda a National Long term Rating of AAA with a stable outlook and an international rating of B+. These ratings further affirm the quality of leadership that has steered the bank over the years to consistently deliver strong and sustainable results.
Stanbic Bank is the first company in Uganda to be rated by an international credit rating firm. The bank’s recently released financial results for 2017 back up this assertion with Stanbic having posted a record Shs200 billion net profit. It also grew its total asset base by 18 per cent to Shs5.4 trillion. Customer loans and advances grew by 8 per cent which resulted in a market share gain of 19 per cent from 17.8 per cent at the start of the year. Customer deposits also grew by 18 per cent to Shs3.62 trillion from Shs3.06 trillion propelling a gain on market share to approximately 20 per cent of all banking deposits in 2017 from 18.7 per cent at the close of 2016.
A credit rating provides a measurement of creditworthiness of a rated company. Per Fitch, AAA is the highest rating of credit quality which indicates lowest expectation of default risk.
The bank’s issuer default rate (IDR) is constrained by the country rate of B+ rating. The stable rating is based on the bank’s solid financial metrics and limited probability of needing support from, Standard Bank Group, the South Africa-based parent company which owns 80 per cent of Stanbic Uganda. According to the Fitch report, SBU has delivered consistently strong earnings and profitability, underpinned by solid interest and non-interest income generation. Low loan impairment charges and good cost control also underpin performance.
Welcoming Fitch’s assessment, Mr Patrick Mweheire the Stanbic Uganda Chief Executive said, “The rating is a definite validation of the bank’s strength by one of the top international credit rating firms. It should further entrench our stakeholders trust in the bank and the renewed sense of optimism within the international business community of Uganda as an investment destination. All indicators point to a slow but steady economic recovery, with our recent PMI index reading reaffirming this having risen from 51.8 in April to 53.4 in May representing the 16th straight month of growth.
He added, “While the current pace of recovery is relatively slow, economic activity is expected to pick up in the last quarter. A lot however hinges on the projected closure of some of the major FEED Oil and Gas contracts and the Final Investment Decision which will be taken thereafter. We are optimistic this will be happening within the first quarter of 2019 given the recent signing of the framework contract for the Oil refinery which is one of the major O&G project components.”