Africa-Press – Uganda. Fitch, a credit rating agency, has retained Stanbic Bank’s National Rating at AAA Stable, the highest possible on a national scale.
The agency also upgraded Stanbic’s Viability Rating, which measures credit worthiness to B+ from B due to improved capital buffers relative to its risk profile.
“The Viability Rating reflects the concentration of the bank’s operations in Uganda’s relatively weak operating environment as well as Stanbic’s leading market position, large capital buffers supported by internal capital generation, diversified and healthy revenue streams and good asset quality,” Fitch said.
Stanbic Bank is the anchor subsidiary of Stanbic Holdings, which is part of Standard Bank Group.
Fitch said the rating comes at a time when Stanbic has just reported strong financial performance for the year ended 2022 as the economy continues to recover from the aftereffects of Covid-19.
Fitch forecasts Uganda’s real gross domestic product to grow by 5.5 percent in 2023 as the economy to continues to be resilient to adverse global conditions and domestic climate risk events.
During 2022, the bank’s impaired loans ratio decreased to 2.9 percent from 4.6 percent, supported by significant write-offs and large recoveries.
Fitch noted that total loan loss allowances significantly increased to 127 percent due to expiry of repayment moratoriums on loans under pandemic-related payment consideration.
During the period, operating profit/risk-weighted assets stood at 7.7 percent, driven by a wide net interest margin (8.3 percent), high non-interest income and lower loan impairment charges.
Fitch noted that it expect profitability to remain high in 2023 due to an anticipation of persistence of high rates will. During the period, Fitch indicated Stanbic’s core capital ratio improved to a high 25.3 percent due to strong internal capital generation.
Expected high profitability
Fitch noted that it expects profitability to remain high in 2023 due to an anticipation of persistence of high rates will. During the period, Fitch also indicated Stanbic’s core capital ratio improved to a high 25.3 percent due to strong internal capital generation.
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