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 Nigeria Deposit Insurance Corporation (NDIC) says it has paid the insured deposits of about 700,000 customers of the defunct Heritage Bank and has commenced the reimbursement of depositors of 46 microfinance banks (MFBs) whose operating licences were recently revoked by the Central Bank of Nigeria (CBN).
The chief executive of NDIC, Mr Oludare Sunday, made this known on Wednesday during a retreat for members of the House of Representatives Committee on Insurance and Actuarial Matters in Lagos.
He said the corporation immediately began settling the insured deposits of customers after the CBN revoked the licences of the 46 microfinance banks and appointed the NDIC as their provisional liquidator.
“We are working on those. The CBN revoked the licences, and we were appointed as the provisional liquidator. We have started paying depositors of those banks, and gradually we intend to cover all the insured depositors,” he said.
Mr Sunday explained that the NDIC’s responsibility extends beyond paying insured deposits to recovering outstanding loans owed to the failed institutions and disposing of their assets to generate funds for the settlement of uninsured depositors.
“Our function as liquidator involves the payment of guaranteed sums. Thereafter, we go after those who owe the institutions and have not paid. We also ensure that we sell the available assets and realise their investments towards paying the uninsured portion of the deposits. So, we have started paying the guaranteed deposits. What we are doing now is also realising the assets of those institutions,” he stated.
Although he declined to disclose the exact number of depositors of the failed microfinance banks who had been reimbursed, Sunday said the Corporation was working with the Nigerian Interbank Settlement System (NIBSS) to identify depositors through their Bank Verification Numbers (BVN) to ensure seamless payments.
“So, the more accounts we discover, the more payments we make,” he added.
Providing an update on the liquidation of Heritage Bank, the NDIC chief said about 700,000 depositors had already received their insured deposits, while efforts were ongoing to trace other customers whose identities could not be verified from available records.
He attributed the challenge to legacy accounts created before the introduction of the BVN system, as well as incomplete customer records inherited from banks that were later merged into Heritage Bank.
“If you know Heritage Bank, you know it is an amalgamation of several banks, including the acquisition of Enterprise Bank in 2014. So, if you think of banks like Guardian Express and Spring Bank, they are all part of Heritage Bank.
“There are depositors we have not been able to trace, and this is an opportunity for them to come forward. I am sure many of us did the National Youth Service Corps (NYSC) and may have left some money in an account, but there was no BVN then.
“Even the addresses we had were sometimes things like ‘opposite filling station.’ How do you trace such a person? Once they come forward, and for those we have been able to identify from the institution’s database, we have been paying them,” he explained.
Mr Sunday added that the Corporation would continue to recover outstanding loans and dispose of Heritage Bank’s assets to generate funds for the payment of liquidation dividends to depositors whose balances exceeded the insured limit.
Earlier in his remarks, he described the NDIC as a critical pillar of Nigeria’s financial safety net, stressing the need for stronger collaboration between regulators and the National Assembly as the banking sector responds to recapitalisation efforts and rapid financial technology developments.
According to him, while the ongoing banking recapitalisation programme has strengthened the resilience of financial institutions, it must be complemented by sound corporate governance, effective risk management, strict regulatory compliance and robust supervision to safeguard long-term financial system stability.
He also disclosed that more than 98 per cent of depositors, representing over 281 million accounts across insured financial institutions, are fully protected under the NDIC’s deposit insurance scheme.
By Adedapo Adesanya
Zenith Bank Plc is investigating an incident involving unauthorised access to customers’ data, noting that the breach does not involve financial information and has not compromised its banking services or digital channels.
In an email sent to customers on Wednesday, the bank stated that the incident was part of a broader global cyberattack affecting multiple international organisations across various sectors.
The lender stated that it immediately activated its incident response protocols and intensified its cybersecurity and remediation efforts upon discovering the incident.
“This incident is part of a broader, global cyber-attack targeting multiple international organisations across various sectors. Upon discovery, we promptly activated our incident response protocols, cybersecurity actions and remediation efforts,” the bank said.
The bank reassured customers that its banking services and digital channels remain secure and fully operational.
As a precautionary measure, Zenith Bank advised customers to remain alert to potential phishing attempts and other forms of social engineering.
“As a precaution, we encourage our customers to remain vigilant against phishing emails, text messages, or phone calls, and never to disclose their password, PIN, One-Time Password (OTP), or other security credentials to anyone,” the bank said.
The incident is the latest in a series of cybersecurity challenges facing Nigerian financial institutions, with banks in recent months suspending their social media operations over impersonation and other fraudulent activities.
Earlier in April, the Nigeria Data Protection Commission (NDPC) said it was investigating alleged data breaches involving Sterling Bank, Remita and the Corporate Affairs Commission (CAC).
Nigerian banks have long been prime targets for cybercriminals because of the vast amounts of customer data and financial transactions they handle every day.
While many attacks have traditionally sought to steal funds, cybercriminals are increasingly targeting personal information, which can be used for identity theft, phishing schemes, account takeovers and other forms of financial fraud.
Cybersecurity threats have increasingly targeted Nigerian banks in recent years. In 2025, Union Bank of Nigeria warned customers about fraudulent websites and phishing campaigns designed to steal login credentials and personal information by impersonating the bank.
In August 2024, Guaranty Trust Bank experienced a domain-related security incident that temporarily disrupted access to its official website, although the lender assured customers that their deposits and banking services remained secure while it resolved the issue.
By Adedapo Adesanya
The chairman of First HoldCo Plc, Mr Femi Otedola, has affirmed plans to increase his 26 per cent holding in the organisation to 51 per cent, confirming a planned takeover of Nigeria’s oldest banking institution.
Mr Otedola spoke in an exclusive interview with Nairametrics published on Monday, giving a rare direction following recent speculations about the financial institution.
The milestone followed a series of share acquisitions, as Mr Otedola sought to tighten his grip as the company’s largest shareholder following the recent acquisition of additional shares worth N222.21 billion.
In the interview, the mogul said he has invested more than N600 billion of his personal wealth in First HoldCo, describing the move as a “long-term generational commitment” rather than another turnaround investment he would eventually exit.
Responding to speculation that he intends to consolidate his position in the group, Mr Otedola hinted that his investment journey is far from over.
“My investment threshold is always over and above 51 per cent,” he said. “One of my key investment principles is that firm shareholder control, with due regard for minority interest, is a key ingredient to executing reforms and restructuring to deliver value to all stakeholders.”
The businessman said the same strategy had guided his investments in African Petroleum Plc, later renamed Forte Oil Plc, where he gradually increased his shareholding from 28 per cent to 75 per cent before exiting the company in 2019.
He said he also increased his stake in Geregu Power Plc from 51 per cent to 95 per cent before reducing it to 77 per cent after the company’s public listing.
“I am on the same trajectory with First HoldCo Plc,” Mr Otedola said.
“To date, I have invested over N600 billion of my personal wealth in First HoldCo Plc — a figure that speaks not to speculation, but to unflinching confidence in the institution’s future, fundamentals and an unwavering personal commitment to its success.”
Mr Otedola said his decision to invest in First HoldCo came at a time when the institution was facing one of the most challenging periods in its history.
The billionaire steadily increased his investment in the group, accelerating his share purchases in 2026. His stake grew from 6.68 billion shares (15.95 per cent) in June 2025 to 8.06 billion shares by March 2026, then to 9.28 billion shares by June after acquiring about 1.22 billion shares in one quarter. A further purchase through Calvados Global Services last month lifted his holdings above 10 billion shares for the first time.
