Banking
S&P Affirms Ratings on Stanbic IBTC Bank, Predicts Robust Earnings in 2018
By Dipo Olowookere
S&P Global Ratings has announced affirming its ‘B/B’ long- and short-term issuer credit ratings on Nigeria-based Stanbic IBTC Bank PLC with a stable outlook.
In a statement issued by the firm, it was disclosed that the ‘ngBBB/ngA-2’ long- and short-term Nigeria national scale ratings on the bank were also affirmed.
Stating further, S&P said its ratings on Stanbic IBTC reflect the creditworthiness of the entire Stanbic
IBTC group because it considers the lender to be the core component of the group.
In addition, it disclosed that Stanbic IBTC Bank is strategically important to the South Africa’s Standard Bank Group (SBG) Ltd and it therefore factored in one notch of group support above Stanbic IBTC’s unsupported group credit profile (GCP), which was assessed at ‘b-‘.
The rating agency noted that the ratings on Stanbic IBTC are capped by the foreign currency sovereign credit ratings on Nigeria as it does not rate Nigerian banks above the sovereign because of the likely direct and indirect influence of sovereign distress on their operations, including their ability to service foreign currency obligations.
Stanbic IBTC operates in the mid-tier of the competitive Nigerian banking sector, and its business position benefits from its affiliation to SBG, as well as its brand recognition and segment diversification. Its corporate and investment banking division accounted for 53.5% of group revenues in 2017. Its wealth management business accounted for 19% of group revenues in the same period. These two divisions were the main contributors to the group’s profitability, resulting in a strong return on equity (ROE) of 28.9% at year-end 2017.
S&P said it expects future profitability to compare well to top-tier Nigerian banks’ with an ROE at around 20%-22% over the next two years.
In contrast, Stanbic’s retail franchise profitability lags behind the other two segments owing to high impairment charges and a weak cost-to-income ratio.
That said, it remains central to the bank’s long-term strategy and focuses on noninterest income as opposed to pure loan growth. It does this by offering enhanced client services via a transactional platform, which will also help attract low cost deposits.
The bank’s funding cost improved slightly to 4.0% in the first quarter of 2018 from 4.6% in 2017. This compares well to some top-tier banks’ cost of funds despite a comparatively modest retail franchise. At the same time, the Stanbic IBTC group improved its cost-to-income ratio to 49%, from 55% in 2016, which better aligns with the best-performing banks in Nigeria.
“We expect Stanbic IBTC to report resilient earnings in 2018 despite muted loan growth, and we estimate our risk-adjusted capital (RAC) ratio will remain broadly stable in the 5.2%-5.7% range over the next 12-18 months compared with 5.1% at year-end 2017.
“We assume a convergence of the investor and exporter window rate toward the parallel rate of N360/$1 in 2018. We also expect falling yields on Treasury bills (T-bills) to put pressure on net interest margins in 2018 as the federal government issues fewer T-Bills.
The group’s strong earnings capacity will support its large capitalization buffer above its minimum regulatory capital of 10% through earnings retention. We estimate the group’s earnings buffer to be above 100 basis points (bps) in 2018, which compares adequately with the best performing Nigerian banks.
“We note that in the first quarter of 2018, the group’s capital adequacy ratio (CAR) has improved despite the IFRS 9 implementation. Stanbic IBTC group’s CAR continued to improve to 25.4% compared to 23.5% reported in 2017. The IFRS 9 adjustment was not material. In the first quarter of 2018, the group adjusted its retained earnings by N10.173 billion for credit impairments and N118 million for other classification and measurement requirements, as a result of IFRS 9 transition,” the rating firm said in the statement.
It said further that, “While we expect high impairment charges to somewhat weigh on the bank’s profitability, we forecast ROE to reduce from its 2017 peak to average 20%-22% over the next two years. While the group managed to record N1 billion in loan recoveries in Q1 2018, we still expect cost of risk to remain high, between 4.5%-5.0% in the next 12-18 months.
“We anticipate nonperforming loans (NPLs) will average 8% in 2018-2019. Our elevated projections are a consequence of high singleobligor concentration. The top-20 loans accounted for 48% of total loans at year-end 2017 while the top-20 NPLs represented over 74% of the bank’s total NPLs at the same date.
“Positively, the bank maintains good loan loss reserve coverage of NPLs, which should remain at about 100% in the next 12-18 months. This, combined with strong earnings capacity, mitigates our view of weaker asset quality indicators compared with peers.”
S&P said the bank’s funding structure has improved over time and mostly relies on customer deposits.
“We think Stanbic IBTC also benefits from its brand reputation and the expertise available within the broader SBG to drive its corporate and investment banking relationships. The group maintains a liquid balance sheet. It has proactively managed its foreign currency balance sheet and has access to parent support in case of need. The group reported a net stable funding ratio of 189% at year-end 2017 and exhibits one of the lowest levels of loan leverage among top peers in Nigeria. Broad liquid assets covered short-term wholesale funding about 5x at the same date,” it added.
By Adedapo Adesanya
The Governor of the Central Bank of Nigeria (CBN), Mr Yemi Cardoso, says Nigeria anticipates remittances from citizens living abroad to increase by two-thirds in 2026 as it seeks to bolster its foreign-exchange reserves to $1 billion monthly.
“We are expecting that by the end of the year, we will hit about a billion Dollars a month from diaspora remittances,” he said at the 14th Annual BusinessDay CEO Forum in Lagos on Thursday, themed From Stability to Shared Prosperity.
Mr Cardoso said remittances are expected to be boosted from more than $600 million currently, banking on the CBN’s deliberate target at remittances to diversify reserve sources beyond oil earnings.
According to him, the apex bank engaged Nigerians abroad, banks and international partners to identify barriers to official remittance flows.
He said the lender subsequently reviewed policies to ensure easier movement of funds into and out of the country.
Mr Cardoso described the approach as providing free entry and free exit for foreign exchange.
He said the reforms helped double diaspora inflows within one year and exceeded initial expectations, also projecting annual remittances could reach about $8 billion if the current momentum was sustained, adding that the development reflected growing confidence in Nigeria’s financial system and foreign exchange market.
Mr Cardoso said reforms introduced by the apex bank had restored stability in the foreign exchange market and improved investors’ confidence.
He identified exchange rate unification as one of the central bank’s major achievements under the reforms programme.
According to him, replacing multiple exchange rate windows with a market-driven system eliminated distortions and improved transparency.
Mr Cardoso said improved foreign exchange liquidity and stronger reserves were among the gains from the reforms.
He said Nigeria’s net external reserves had risen from about $3 billion at the start of the reforms to above $40 billion currently, noting that gross external reserves had grown to about $52 billion, representing about 10 months of import cover.
According to him, the reserves are designed to shield the economy from external shocks and excessive market volatility.
He said the reserves were not meant for routine interventions or day-to-day exchange rate management.
By Modupe Gbadeyanka
The flagship banking subsidiary of Guaranty Trust Holding Company (GTCO) Plc, Guaranty Trust Bank (GTBank) Limited, has been announced as the winner of Nigeria’s Best Digital Bank award at the Euromoney Awards for Excellence 2026.
The lender clinched this accolade at the Euromoney Awards for Excellence 2026 ceremony, held on July 17, 2026, at The Peninsula London, England, for its outstanding performance, innovation, customer service, and leadership.
GTBank’s recognition as Nigeria’s Best Digital Bank reflects its continued leadership in digital innovation and its commitment to delivering seamless, secure, and customer-centric financial solutions.
As the banking franchise of GTCO, GTBank has consistently set industry benchmarks in digital transformation, pioneering solutions that have redefined how individuals and businesses access, manage, and experience financial services.
Over the years, GTBank has transformed the banking experience through a suite of innovative digital platforms, including the GTWORLD mobile app and solutions that provide millions of customers with seamless, secure, and convenient access to financial services.
The bank continues to strengthen its digital capabilities by introducing products and services that meet evolving customer needs while maintaining the highest standards of security, reliability, and service excellence.
This latest recognition underscores the company’s position as a market leader and reflects its sustained investment in technology, operational excellence, and innovation.
“This recognition is a testament to the legacy upon which GTBank was built and the vision that continues to guide us today.
“From inception, our goal has been to deliver on the Group’s vision to make end-to-end financial services accessible to everyone by leveraging technology to remove barriers, simplify experiences, and create meaningful value for our customers,” the chief executive of GTBank, Mrs Miriam Olusanya, stated.
“While we are honoured by this recognition, we see it as an acknowledgement of what we have achieved and a motivation to do even more.
“We remain focused on raising the bar for digital banking, investing in innovative solutions, and delivering exceptional experiences that create lasting value for our customers.
“As the financial services landscape continues to evolve, we will continue to innovate, adapt, and lead with the same commitment to excellence that has defined our franchise for decades,” she added.
The Euromoney Awards for Excellence 2026 convened leading financial institutions, industry executives, and policymakers from across the globe to celebrate excellence, innovation, and leadership in the financial services sector.
By Aduragbemi Omiyale
A collaboration to enable fast money transfers into Nigeria has been entered into between Flutterwave and Xoom, PayPal’s international digital money transfer service.
The partnership allows Xoom transfers to be converted by Flutterwave and settled locally in Naira, enabling quick transfers directly into recipients’ bank accounts at Access Bank, UBA, Zenith Bank, First Bank, GTBank, and additional participating banks across Nigeria.
The deal also enables Xoom’s global network with Flutterwave’s local payout infrastructure, allowing users globally to send funds directly into Nigerian bank accounts with improved speed and efficiency.
Nigeria is the leading remittance recipient in Sub-Saharan Africa, receiving over $20 billion in personal remittances in 2024. Despite this volume, receiving international payments has historically remained complex due to FX constraints and settlement delays. This collaboration helps address those challenges in a market of more than 232 million people, where the ICT sector is projected to contribute 21 per cent of GDP by 2027.
By combining Xoom’s expansive reach with Flutterwave’s local compliance and banking partnerships, the two companies are providing a more accessible financial corridor for the continent.
Xoom, a PayPal service, is a fast and secure international digital money transfer service that enables consumers to send money, pay bills, and reload phones for friends and family in approximately 160 markets globally.
As part of PayPal’s global payments ecosystem, Xoom leverages advanced fraud protection, compliance capabilities, and a trusted global network to help millions of customers move money quickly and securely across borders.
“We’re excited to have been chosen by Xoom for their Nigeria expansion. Millions of Nigerians rely on money from abroad to support everyday needs, whether it’s families receiving help from loved ones, freelancers getting paid for their work, or individuals earning income from the global economy. This helps make it easy and more reliable for people in Nigeria to receive funds and stay connected to opportunities beyond borders,” the chief executive of Flutterwave, Mr Olugbenga GB Agboola, stated.
