Global credit rating agency gives the thumbs up to ABC Bank

African Banking Corporation chief executive Shamaz Savani walks past the banking entrance. FILE PHOTO |  NATION MEDIA GROUP

By NATION REPORTER
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ABC Bank’s profile has received a boost following a positive rating of its operations by an international agency.

The Global Credit Rating Company said the bank’s outlook is “stable”. The assessment is valid until October next year.

It said the positive rating was supported by the bank’s moderate financial and business risk profile, growth in business, efficiency in balance sheet, non-performing loans recovery, cost control, as well as success in a private bond issue in May this year.

ABC successfully issued a Sh650 million private bond, which was oversubscribed by 57 per cent.

Its management, through a statement, said the upgrade of the bank’s short term rating — from A3 to A2 — is a reflection of positive operational changes in the business, including the bank’s enhanced funding profile and potential for internal growth.

STABLE INVESTMENT VEHICLE

“We are excited about the new rating. It positions the bank as a safe and stable investment vehicle for investors, as it is a stamp of financial soundness and stability,’’ said ABC Bank Group Managing Director Shamaz Savani. 

GCR said that appropriate deployment of capital, improved profitability, diversification of income streams, innovation, and a reduction in funding costs may have a positive impact on the bank’s long-term rating going forward.

“This good rating assures our stakeholder of the fundamentals of our business, its actual strength, financial standing, and management details, giving them greater confidence in us,’’ said Mr Savani.