GCR Affirms Stanbic IBTC Bank PLC SNP Series 1 (Tranche A and Tranche B) Notes Ratings of A(NG).

22 Sep 2015 In Rating Notifications

GCR Affirms Stanbic IBTC Bank PLC SNP Series 1 (Tranche A and Tranche B) Notes Ratings of A(NG).

Lagos, 22 September 2015—Global Credit Ratings has today affirmed the national scale long-term credit ratings of A(NG) accorded to the Series 1 (Tranche A and Tranche B) Notes issued under Stanbic IBTC Bank PLC (“Stanbic” or “the bank” or “the Issuer”) N150bn Structured Note Programme (“SNP”); with the outlooks accorded as Stable. The ratings are valid until July 2016.

·      Series 1 (Tranche A) N100.0m 10-year Subordinated Notes, issued July 2014.
·      Series 1 Tranche B)  N15.44bn 10-year Subordinated Notes, issued July 2014.


RATING RATIONALE

Global Credit Ratings has accorded the above final credit ratings based on the following key criteria:

Stanbic is a wholly owned subsidiary of Stanbic IBTC Holdings PLC (“the Holdco”), which is a member of the Standard Bank Group (“SBG”). SBG is Africa’s largest banking group ranked by assets and earnings. While the bank ranks well among the mid-sized banks in Nigeria, a key rating strength is the parental support (both financial and technical) from the Holdco, and ultimately SBG.

The bank’s performance improved in F14, ending the year with a net profit after tax (“NPAT”) of N19.5bn, translating to a sizeable 92.1% growth over F13. The growth was largely fuelled by higher net interest income and foreign currency revaluation earnings (which may not be repeated in future years). Although the bank displayed subdued profitability in the first half of F15 due to higher interest expenses, performance is expected to improve in the second half of F15 as the bank streamlines operating expenses and reduces its cost of funding.

Per the quarterly performance reports provided by the Trustee to the Noteholders, in the period up to 31 March 2015, the Issuer has met all its obligations under the Issuance on a timely basis.

The ratings reflect the unsecured and subordinated nature of the Series 1 (Tranche A and Tranche B) Notes, ranking after all senior indebtedness and the claims of depositors of the Issuer. As such, the accorded ratings are 2 notches lower than the Issuer’s national scale long-term rating of AA-(NG), which has a Stable outlook.

Since no third party guarantee is in place, timely fulfilment of the Issuer’s obligations under the Issues solely depends on its financial performance. Thus, the accorded ratings would be sensitive to a positive rating action on the Issuer. Non-compliance with the set covenants or a downgrade in the Issuer’s rating could trigger a negative rating action.


NATIONAL SCALE RATINGS HISTORY
Series 1 (Tranche A)                                                               
Initial/last rating (July 2014)                                         
Long term: A(NG)                                                                                   
Outlook: Positive                                                                        

Series 1 (Tranche B)
Initial/Last rating (July 2014)                       
Long term: A(NG)                                                           
Outlook: Positive                                    


ANALYTICAL CONTACTS

Primary Analyst                                                                    Committee Chairperson
Julius Adekeye                                                                         Dave King
+23 41 462 2545                                                                       .(JavaScript must be enabled to view this email address)
.(JavaScript must be enabled to view this email address)

APPLICABLE METHODOLOGIES AND RELATED RESEARCH
Global Criteria for Rating Banks and Other Financial Institutions, updated March 2015
Stanbic rating reports (2014-15)
Previous Issue rating report (2014)
Glossary of Terms/Ratios (February 2015)


RATING LIMITATIONS AND DISCLAIMERS

ALL GCR’S CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://GLOBALRATINGS.COM.NG/UNDERSTANDING-RATINGS. IN ADDITION, GCR’S RATING SCALES AND DEFINITIONS ARE ALSO AVAILABLE FOR DOWNLOAD AT THE FOLLOWING LINK:  HTTP://GLOBALRATINGS.COM.NG/RATINGS-INFO/RATING-SCALES-DEFINITIONS. GCR’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, PUBLICATION TERMS AND CONDITIONS AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE AT HTTP://GLOBALRATINGS.COM.NG.


SALIENT FEATURES OF ACCORDED RATINGS

GCR affirms that a.) no part of the rating was influenced by any other business activities of the credit rating agency; b.) the rating was based solely on the merits of the rated entity, security or financial instrument; c.) such rating was an independent evaluation of the risks and merits of the rated entity, security or financial instrument; and d.) the validity of the rating is for 12 months, or as indicated by the applicable credit rating document.


The ratings were solicited by, or on behalf of Stanbic IBTC Bank PLC, and therefore, GCR has been compensated for the provision of the ratings.

Stanbic IBTC Bank PLC participated in the rating process via face-to-face management meetings, teleconferences and other written correspondence. Furthermore, the quality of info received was considered adequate and has been independently verified where possible.

The credit ratings above were disclosed to Stanbic IBTC Bank PLC with no contestation of/changes to the ratings.

The information received from Stanbic IBTC Bank PLC and United Capital Trustees Limited to accord the credit ratings included the Issuer’s 31 December 2014 audited financial statements, management accounts for the 6 month period to 30 June 2015, quarterly Trustees’ performance reports up to March 2015, the Master Trust Deed for the Structured Note Programme, the Programme Shelf Prospectus, the Series 1 (Tranche A and Tranche B) Trust Deeds, as well as the relevant Supplemental Shelf Prospectuses.

 

 

 

 

 

 

 

 

ALL GCR CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS, TERMS OF USE OF SUCH RATINGS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS, TERMS OF USE AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://GLOBALRATINGS.COM.NG/UNDERSTANDING-RATINGS. IN ADDITION, RATING SCALES AND DEFINITIONS ARE AVAILABLE ON GCR’S PUBLIC WEB SITE AT HTTP://GLOBALRATINGS.COM.NG/RATINGS-INFO/RATING-SCALES-DEFINITIONS. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. GCR’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE UNDERSTANDING RATINGS SECTION OF THIS SITE.

ALL GCR CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS, TERMS OF USE OF SUCH RATINGS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS, TERMS OF USE AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://GLOBALRATINGS.COM.NG/UNDERSTANDING-RATINGS. IN ADDITION, RATING SCALES AND DEFINITIONS ARE AVAILABLE ON GCR’S PUBLIC WEB SITE AT HTTP://GLOBALRATINGS.COM.NG/RATINGS-INFO/RATING-SCALES-DEFINITIONS. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. GCR'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE UNDERSTANDING RATINGS SECTION OF THIS SITE.

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