Stanbic Bank gets higher Moody’s rating

A Stanbic Bank stand during a Customer week exhibition in Kampala. Global rating agency Moody’s has given Stanbic Bank Uganda a local currency deposit rating of B1. PHOTO | FILE | NATION MEDIA GROUP 

In Summary

• The rating has been informed by the bank’s strong capitalisation and increasing reliance on non-deposit funding to grow its size in the coming years.

By The EastAfrican
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Global rating agency Moody’s has given Stanbic Bank Uganda a local currency deposit rating of B1. According to the agency, the rating is a notch above Uganda's sovereign issuer rating of B2.

The rating has been informed by the bank’s strong capitalisation and increasing reliance on non-deposit funding to grow its size in the coming years.

“Going forward, we expect the bank capitalisation to remain strong, primarily because of Stanbic Uganda's resilient profitability metrics,” said Moody’s.

According to Moody’s, the resilience in Stanbic Uganda's profitability reflects South Africa’s Standard Bank Group Ltd’s strong banking of the franchise in Uganda, as the lender is Uganda's largest bank by market share of loans (18 per cent) and serves over 0.5 million customers.

“The drop in the yields of Stanbic Uganda's government portfolio, on account of the central bank's monetary easing, has been offset by interest revenues and commission income from robust loan growth.

“We expect profitability to continue to be buoyed by Stanbic Uganda's robust loan growth over the next 18 months as the bank seeks to grow its lending business in the oil and gas space and in the small and medium-sized enterprises sector,” said Moody’s.