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Sterling Bank plc retains “bbb+” rating with positive outlook

Sterling Bank Plc has been affirmed long-term rating of “BBB+” with a positive outlook for the year 2021/2022 by DataPro, a technology-driven credit rating agency in its latest report.

The “BBB+” indicates Slight Risk. It shows Fair Financial Strength, Operating Performance and Business Profile when compared to the standard established by DataProLimited.

“Sterling Bank Plc, in our opinion, has the ability to meet its ongoing obligations, but its financial strength is vulnerable to adverse changes in economic conditions,” DataPro noted.

During the year under review, the bank was able to grow its earnings capacity and profitability. Gross earnings went up from N133.4 billion in 2022 to N139.9 billion in 2021. Also, pre-tax profit increased from N12.2 billion in 2020 to N14.3 billion in 2021.

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The bank also has strong liquidity coverage for the mismatch in the maturity profiles of its deposit and loans, the liquid assets of the bank provide adequate cushion resulting in a net liquidity surplus of N63.5 billion in the long term.

The DataPro rating Committee approved the rating after an assessment of the company’s financial performance, capital adequacy, asset quality, liquidity, profitability, corporate governance & risk management as well as risk factors of its current healthy profile in the medium to long-term period.

Sterling Bank had a short-term rating of “A2” which indicates Fair Credit Quality and adequate capacity for timely payment of financial commitments.

The rating of Sterling Bank is also supported by its diversified revenue base, experienced management, milestones achieved in the retail business segment, very strong asset quality as well as improved profitability.

DataPro notes that the rating carries a maximum shelf life of 12 calendar months, in line with International Best Practices. The rating is therefore not an offer to trade in securities nor a substitute for the user’s judgment. It is meant for reference purposes.