GCR Ratings (“GCR”) on
August 25, 2022, in Johannesburg affirmed its strong rating of Ecobank Ghana -
long and short-term issuer ratings of A+(GH) and A1(GH) respectively, with a
positive outlook.
The Rating agency also extended the rating to September 30, 2022.
In a report published on its website, the GCR stated that: “The ratings on
Ecobank Ghana PLC (“Ecobank Ghana”) reflect a strong business profile supported
by leading market shares, stable funding sources and good levels of liquidity.
“The ratings also factor in improving capitalization and increasing asset
quality risk. The competitive positioning of the bank is a relative strength to
the rating, benefiting from its well-established franchise and leading domestic
position as a top tier financial institution”.
The report continued that “Ecobank Ghana is one of the leading digital banks in
Ghana leveraging on Ecobank Transnational Incorporated’s (ETI’s) extensive
digital strategy innovations.
“…we consider the bank to be adequately equipped to deal with the ramifications
of COVID-19 from a business continuity level. Ecobank Ghana is adequately
capitalized. We think the COVID-19 pandemic has not had as severe an impact on
the bank’s earnings when compared to domestic peers, and we believe the bank’s forward-looking
earnings capacity is still good and will support future capital generative
capability”.
On Funding and Liquidity, the GCR Ratings indicated that “The bank’s funding is
considered stable, with customer deposits making up 94% of the group’s funding
base. Though deposits are predominantly demanded deposits, they have
historically been sticky”.
On the Bank’s parent company, GCR indicates that “Although not a material asset
or revenue contributor, there is evidence of integration and technical support
from the parent”.
The bank’s other shareholders are the Social Security and National Insurance
Trust (16.21%), and the remaining shareholders own less than 2%.
The GCR Ratings on its outlook indicated that it expected Ecobank Ghana’s
financial profile to continue to be resilient despite the strains in the
operating environment and that the bank will outperform the market in terms of
earnings over the rating horizon.
Ecobank’s previous rating history from 2013 to date has been very strong and reflects
the strong capitalization levels of the Bank.
Unlike the Fitch ratings which tended to cap the ratings based on the ratings
assigned to the country, the GCR rating was based primarily on the Bank,
highlighting its strength, financial performance, sustainability, and
income-generating capability.
It will be recalled the Fitch Ratings downgraded all Banks in Ghana following
the country’s downgrade.
GCR Ratings’ next rating of Ecobank Ghana is due at the end of September 2022.
Source: Josephine Acheampomaa