Fitch, which is known as the international credit rating agency has affirmed Stanbic Bank Uganda Limited’s (SBU) Long-Term Issuer Default Rating (IDR) at ‘B+’ while it also maintains its ‘AAA’ rating in Uganda.
According to Fitch, Stanbic Bank Uganda’s National Ratings reflect its creditworthiness relative to other issuers in Uganda. Stanbic Bank Uganda’s National Long-Term Rating is the highest possible on Uganda’s national scale and considers potential support available from Standard Bank Group. SBU’s Long-Term IDR is one notch below that of SBG, reflecting SBU’s strategically important role in the group’s regional operations.
Its leading domestic franchise is underpinned on a strong corporate and investment banking (CIB) business, relationships with the leading corporate companies operating in Uganda and other benefits derived from being part of the Standard Bank Group (SBG), which is Africa’s biggest lender by assets.
Fitch regularly generates IDRs for a range of business sectors. An ‘issuer’ may be a financial or nonfinancial corporation, a sovereign company, or an insurance company. A ‘Default Rating’ is the measure of an institution’s credit risk
Risk is defined by a company’s threat of becoming defunct or entering into bankruptcy, administration, receivership, liquidation, or other formal winding-up procedures. Fitch relies on independent auditors and other experts to produce IDRs.
Fitch states that SBU’s regulatory capital ratios have healthy buffers above the new minimum requirements. ‘The Stable Outlook reflects our view that SBU’s creditworthiness compared to other domestic issuers is unlikely to change over a one- to two-year period. SBU’s profitability is expected to further recover in 2022 resulting from a likely rise in Uganda’s interest rates and stronger loan growth’.
“We welcome the positive rating by Fitch which speaks to the stability of our business and ability to support Uganda’s economic growth in a challenging operating environment,” said Anne Juuko, Stanbic Bank Chief Executive.