Fitch Affirms Stanbic IBTC Bank at ‘AAA(nga)’

Fitch Ratings has affirmed the National Ratings of Stanbic IBTC Bank PLC and its non-operating holding company, Stanbic IBTC Holding Company PLC, both at Long-Term ‘AAA(nga)’ and Short-Term ‘F1+(nga)’ respectively.

The ratings of Stanbic IBTC and its parent company are based on potential support from their ultimate parent, South Africa’s Standard Bank Group (SBG; BB+/Stable), which owns 64.58% of holding firm (which in turn owns 100% of Stanbic IBTC). Standard Bank increased its ownership in Stanbic IBTC Holding Company in 2018, which reflects, the strategic importance of both entities to Standard Bank.

The National Ratings reflect Standard Bank’s ability to support the subsidiaries and the group’s willingness to do so. The ability to support considers its Long-Term IDR of ‘BB+’ as well as Nigeria’s Country Ceiling of ‘B+’.

Fitch said it believes that Standard Bank’s willingness to support the group’s Nigerian subsidiaries is high. Factors considered include Stanbic IBTC Holding Company’s and Stanbic IBTC’s role in the group as Standard Bank’s main operations in West Africa, the ownership size and strong operational integration.

Fitch says it further believes that Standard Bank’s support, if needed, would extend equally to the bank and to the holding company.

Stanbic IBTC Holding Company is the holding company for Standard Bank’s Nigerian operations. Its main operating entity Stanbic IBTC, a mid-tier commercial bank with a 3% market share of industry assets, forms 96% of the holding company’s assets.

Fitch has also affirmed the expected National long-term ratings assigned to Stanbic IBTC’s upcoming N30 billion senior unsecured notes issue and the expected National long and short-term ratings assigned to the N150 billion structured note programme of senior unsecured debt.

Fitch said given Nigeria’s Country Ceiling of ‘B+’, Stanbic IBTC Holding Company’s and Stanbic IBTC’s National Ratings could withstand up to a two-notch downgrade of Standard Bank’s Long-Term Foreign-Currency IDR of ‘BB+’ before they would be affected. Downside risk to the ratings could also stem from a decline in Standard Bank’s willingness or ability to provide support, or from a change in Standard Bank’s stake, resulting in a loss of control.

Fitch said a downgrade of Nigeria is unlikely to result in a downgrade of Stanbic IBTC Holding Company‘s or Stanbic IBTC’s National Ratings because the position of the bank relative to other local credits would not change.

The expected ratings on the senior notes and programme are sensitive to changes in Stanbic IBTC Holding Company’s National Long-and Short-Term Ratings.