Fitch Ratings has affirmed its ratings on many Nigerian banks in a report that lent credence to the stability of the banking industry.
In its latest ratings review, Fitch affirmed its ratings on United Bank for Africa (UBA) , Stanbic IBTC Holdings, Stanbic IBTC Bank, Sterling Bank and First City Monument Bank (FCMB).
Fitch Ratings affirmed UBA’s Long-Term Issuer Default Rating at ‘B’ with a stable outlook, Viability Rating at ‘b’ and National Long-Term Rating at ‘A+(nga)’.
The agency also affirmed Sterling Bank’s Long-Term Issuer Default Rating at ‘B-’ with a stable outlook, Viability Rating at ‘b-’ and National Long-Term Rating at ‘BBB+(nga)’.
Also, Fitch Ratings affirmed FCMB Limited’s Long-Term Issuer Default Rating at ‘B-’ with a stable outlook, Viability Rating at ‘b-’ and upgraded the bank’s National Short-term Rating to ‘F1(nga)’ from ‘F2(nga)’ due to the bank’s improving funding and liquidity.
Fitch Ratings also retained the National Long-Term Ratings of Stanbic IBTC Holdings and its 99.9 pe rcent owned subsidiary, Stanbic IBTC Bank at ‘AAA(nga)’.
The latest audited results of UBA for the year ended December 31, 2021 had shown appreciable growths across key financial metrics. Gross earnings rose to N660.2 billion in 2021, representing an increase of seven per cent on N616.8 billion recorded in 2020.
Despite the huge challenging business and slow economic recovery in most of its countries of operations, UBA’s profit before tax rose by 20.3 per cent to N153.1 billion in 2021, compared with N127.3 billion in 2020. Profit after tax grew by 8.7 per cent to N118.7 billion in 2021 as against N109.2 billion recorded in the previous year.
Total assets rose by 11 per cent to an unprecedented N8.5 trillion in 2021, up from N7.7 trillion in 2020, thus marking the first time the bank’s assets will cross the N8 trillion mark. Similarly, net loans grew by 7.7 per cent to N2.8 trillion. Customer deposits rose by 12.2 per cent to N6.4 trillion in 2021 compared with N5.7 trillion in 2020, reflecting increased customer confidence, enhanced customer experience, successes from the ongoing business transformation programme and the deepening of its retail banking franchise.
Further analysis had shown that in 2021, the bank’s operating income rose by 10 per cent to N443 billion compared with N403 billion in the previous year, whereas operating expenses closed the period at N279 billion. Earnings per share increased to N3.39 in 2021 as against N3.10 in 2020. The bank paid a final dividend of 80 kobo per share, in addition to an interim dividend of 20 kobo earlier paid, bringing the total dividend payout to N1 per share. This represented a payout ratio of about 29.5 per cent, indicating that the bank locked in more earnings to drive growth.