Banking
Moody’s Sees Vulnerabilities in This Tier Two Bank’s Asset Quality
**Says GTBank, Zenith Bank Strong to Withstand Shocks
By Modupe Gbadeyanka
Moody’s Investors Service has announced the downward review of the outlook of Sterling Bank Plc to negative from stable following the negative outlook on Nigeria’s government issuer rating.
In a statement issued this month, the rating agency said the lowering of Nigeria’s rating affects the bank’s credit profile as well as resulting in a lower ability to support the b3 BCA, which it said reflects Sterling Bank’s vulnerabilities in asset quality because of high single-name and sector concentration risks.
According to Moody’s, the lender has a large exposure to government debt securities and loans at 275 percent of its tangible common equity as of June 2019, noting that the company will likely be more exposed to negative pressure on its revenue generation capacity and its asset risk than its top-tier local peers due to its relatively small size and client base.
It was further stated that the b3 BCA shows bank’s modest capital levels, especially in light of high asset risks and high foreign-currency loans, stressing that these challenges are balanced against its deposit-based funding profile and stable local-currency liquidity, stating that the “local currency deposit rating is B2 while the local currency national scale rating is A2.ng.”
Also, commenting on other banks, Moody’s said Union Bank of Nigeria, FCMB and Fidelity Bank will likely be more exposed to negative pressure on their revenue generation capacity and asset quality than their top-tier local peers due to its relatively small size and client base.
For Union Bank, it said the b3 BCA reflects its high asset risks and low coverage of NPLs by provisions, which increases the risk of capital erosion in case of loan losses.
It further said this shows weak efficiency and moderate profitability; and still-tight, although improving, foreign-currency funding position, saying these challenges are moderated by the company’s stable deposit-based funding profile, particularly in local currency.
On the part of FCMB, it was stated that the b3 BCA reflects its elevated credit risks stemming from high single-name and sector concentrations; and relatively modest profitability levels compared with those of its top-tier local peers, noting that these challenges are balanced against its robust levels of tangible common equity compared with that of its global peers, stable deposit-based funding structure, and robust local-currency liquidity buffers.
For Fidelity Bank, the rating firm said the b3 BCA shows the lender’s relatively tight funding conditions, as reflected by its high, although improving, loan-to-customer deposit ratio; and high proportion of foreign-currency loans.
It said these challenges are mitigated by the lender’s relatively high provision coverage of NPLs; and solid capital buffers with a tangible common equity-to-risk-weighted asset that is comparable to global peers, although the bank’s capital buffer against the regulatory requirement is small.
But for Guaranty Trust Bank, Moody’s said b2 BCA reflects its resilient earnings generation capacity and robust capital buffers; high liquidity buffers and its predominantly deposit funded balance sheet; and robust franchise, which allows the bank to earn relatively higher margins and relatively low credit costs.
Also, it said Zenith Bank’s BCA of b2 reflects its resilient earnings generating capacity and robust capital buffers, which together provide a buffer to withstand asset-quality deterioration; high liquidity buffers and a predominantly deposit-funded balance sheet; and robust franchise, which allows it to attract inexpensive deposits, relative to other Nigerian banks, adding that “These strengths are moderated by the bank’s high proportion of more confidence-sensitive corporate deposits versus retail deposit.”
For UBA, it stated that the b2 BCA shows moderate asset risk profile, supported by its relatively more diversified loan book than that of its local peers; resilient profitability, which supports its capital buffers; and predominantly deposit-funded balance sheet, which is supported by a solid pan-African franchise, and strong local-currency liquidity buffers.
“These strengths are counterbalanced by UBA’s rising, although still moderate, dependence on confidence-sensitive funding,” the statement from Moody’s said.
Commenting on the b3 BCA of First Bank, the rating agency said it reflects the lender’s still-high stock of NPLs, although reducing, and moderate capital buffers, emphasising that these challenges are moderated by the bank’s resilient pre-provision profitability and stable funding profile, which is supported by a large stock of liquid assets.
By Aduragbemi Omiyale
The digital banking arm of Wema Bank Plc, ALAT, is scheduled for an upgrade this month, a statement from the lender has revealed.
Tagged ALAT: The Evolution, Wema Bank said it is adding more features to the platform to once again redefine the future of banking and set the standard on the next chapter in the industry.
With ALAT: The Evolution, the company is pushing the envelope even further, saying it represents a thoughtful evolution of everything users already love about ALAT; redesigned to feel more intuitive, more responsive, and more personal.
From faster interactions, to a smarter understanding of user behavior, to the introduction of SAW (Smart ALAT by Wema, an AI assistant on the ALAT App), the upgraded ALAT will show how far digital banking has come, and how much further it can go when innovation is intentional.
When ALAT by Wema first launched in 2017, it made history as Africa’s first fully digital bank, changing how millions of people viewed and experienced banking.
With the upgraded version of ALAT, Wema Bank is again reaffirming its position as the most innovative bank in the banking industry.
By Adedapo Adesanya
Access Bank Congo has appointed Mr Adeboye Ayewamide as its new chief executive, following regulatory approval from the Central Bank of the Congo.
Mr Ayewamide succeeds Mr Arinze Osuachala, who led the bank for eight years.
In a press release, Access Bank said Mr Osuachala’s tenure marked a shift for the institution, transforming it from a small franchise into a profitable and well-capitalised bank. During this period, the bank recorded steady balance sheet growth, strengthened its revenue base, and maintained capital levels above regulatory requirements.
Mr Ayewamide brings over 18 years of banking experience across commercial banking, operations, risk management, customer experience, and technology transformation. He has held several leadership roles within the Access Bank Group, with a track record focused on execution and institutional growth.
He is an alumnus of Harvard Business School, Wharton, IMD, and Lagos Business School, and holds a Chartered MBA from Bangor University as well as an MBA in Finance from Obafemi Awolowo University (OAU), Ile-Ife, Osun State.
Under the outgoing leadership, Access Bank Congo expanded its network from 2 to 22 locations nationwide and upgraded its core systems to improve operations and service delivery.
The Chairman of the Board, Mr Aubin N’semy Mabanza, stated, “We are pleased to welcome Mr Adeboye Ayewamide as the new Managing Director of Access Bank DRC SA. His leadership experience, strategic depth and human-centric approach ideally position him to lead the Bank into its next phase of growth.
The Board also expresses its sincere appreciation to Mr Osuachala for his exemplary leadership and the remarkable progress made during his tenure, which has significantly strengthened the Bank’s financial strength and strategic relevance.
Mr Ayewamide expresses enthusiasm, stating, “It is an honour to lead Access Bank RDC SA at this crucial time. I look forward to working closely with our stakeholders to build on the strong foundation already in place, accelerate innovation, deepen financial inclusion, and deliver sustainable value to our customers and communities.”
“Leading Access Bank DRC SA has been a privilege. I am proud of the transformation we have accomplished together and grateful for the commitment of our teams, the support of our regulators and the trust of our customers. I am confident that the Bank will continue to prosper under Mr Ayewamide’s leadership,” Mr Osuachala reflected.
Access Bank RDC SA is entering a new stage of strategic execution and expansion with this leadership change as it aims to become the most reputable African bank in the world.
By Adedapo Adesanya
Sterling Bank has partnered with global cross-border payments infrastructure company, Thunes, to enable easier international money transfers for Nigerians living abroad.
In a statement, Thunes said this alliance ultimately ushers in a new standard for cross-border payments, empowering Nigerians abroad with a quicker and simpler method of sending funds home.
Remittances have become a regular with an estimated 17 million Nigerians living and working abroad allowing billions trickling from diaspora into Nigeria with available data showing that the Nigerian diaspora remitted over $20 billion in 2024, an increase of 9 per cent on 2023.
Thunes and Sterling Bank believe that demand for fast, transparent and dependable financial connections to home has never been greater.
“This collaboration reflects the shared commitment of Thunes and Sterling Bank to financial inclusion, and community empowerment, helping people improve financial oversight while spending more effectively. It also supports Thunes’ mission to onboard the next billion end users in emerging markets into the global economy,” they said in a statement.
By leveraging Thunes’ Direct Global Network, Sterling Bank is rolling out this enhanced capability across multiple European markets, giving customers abroad a more consistent way to support their families and manage finances. Via the partnership, new and existing Sterling Bank account holders can now enjoy seamless, instant payments across borders.
“Together, we’re enabling a new level of convenience, speed, and confidence for customers managing finances across borders,” said Mr Daniel Parreira, Senior Vice President of Sales – Africa at Thunes, adding that, “ This alliance demonstrates our ongoing dedication to making global money movement instant, transparent, and accessible for all.”
On his part, Mr Ayodeji Saba, Head, Switch & Remittances at Sterling Bank, said “With Thunes’ trusted technology, we’re giving our customers a faster, more reliable, and more affordable way to fund their Sterling Bank accounts from their foreign bank accounts. It’s a major step forward in improving the experience for our diaspora community.”
The move is coming three years after Thune’s deal with Access Bank in 2023 to facilitate cross-border payments across its African subsidiaries.
-
Feature/OPED6 years agoDavos was Different this year
-
Travel/Tourism9 years ago
Lagos Seals Western Lodge Hotel In Ikorodu
-
Showbiz3 years agoEstranged Lover Releases Videos of Empress Njamah Bathing
-
Banking8 years agoSort Codes of GTBank Branches in Nigeria
-
Economy3 years agoSubsidy Removal: CNG at N130 Per Litre Cheaper Than Petrol—IPMAN
-
Banking3 years agoFirst Bank Announces Planned Downtime
-
Banking3 years agoSort Codes of UBA Branches in Nigeria
-
Sports3 years agoHighest Paid Nigerian Footballer – How Much Do Nigerian Footballers Earn