GCR Affirms Sterling Bank’s Ratings With Stable Outlook
GCR Ratings has affirmed Sterling Bank Limited’s national-scale long-term and short-term issuer ratings at BBB+(NG) and A2(NG), respectively, with a stable outlook.
The ratings reflect the strengths and weaknesses of Sterling Financial Holdings Company Plc, the non-operating group comprising Sterling Bank, SterlingFI Wealth Management Limited and Alternative Bank Limited.
According to GCR, Sterling Bank remains the group’s core operating entity, accounting for more than 90.2% of total assets and 80% of operating revenue as of 31 December 2025.
GCR said the bank’s ratings were equalised with the group’s Anchor Credit Evaluator and balanced its established market position, sound risk profile, stable funding structure and adequate liquidity against its improved but intermediate capitalisation.
The group’s competitive position is anchored by Sterling Bank, a mid-tier national commercial bank with an estimated 2.3% share of Nigerian banking-sector assets as of December 2025. The bank provides retail, corporate and institutional banking services to more than six million customers.
Its conventional banking operations are complemented by growing non-interest banking and asset-management subsidiaries, which GCR said could broaden the group’s value proposition, strengthen its market presence and diversify revenue.
Operational efficiency has also improved, with the cost-to-income ratio declining to 58.9% as of 30 June 2026, from 61.6% in 2025 and 72.1% in 2024.
GCR said sustained growth across its subsidiaries could strengthen the group’s franchise and diversify earnings beyond the outlook period.
Capitalisation improves
The group’s capitalisation strengthened over the past 12 months following an additional capital injection to meet new regulatory requirements for national banks.
Consequently, the GCR core capital ratio increased to 16.5% as of June 2026, from 13.1% in 2025 and 12.6% in 2024.
GCR expects the ratio to remain between 15% and 17% over the next 12 to 18 months, balancing projected earnings against growth in risk-weighted assets.
Asset quality remains sound
The group’s risk position remains a major ratings strength, supported by asset-quality indicators that compare favourably with the banking industry average.
Its non-performing loan ratio stood at 4.7% as of June 2026, unchanged from December 2025. This was below the regulatory threshold of 5% and the banking-sector average of approximately 8%.
Loan-loss coverage of stage-three loans also improved to 93.6%, from 79.9% in the previous year. Although the loan portfolio remained concentrated in the oil and gas sector, the sector’s share of gross loans fell to 25.9% in 2025, from 32.2% in 2024.
No other sector represented more than 20% of the loan book. The rating note said the bank’s single largest obligor and 20 largest obligors accounted for 3.5% and 44.3% of gross loans, respectively, as of December 2025.
GCR expects the bank’s prudent underwriting and rigorous monitoring of exposures to sustain conservative asset-quality metrics over the next 12 to 18 months.
Stable funding and liquidity
Funding and liquidity remain positive ratings factors, reflecting the group’s stable funding structure and adequate liquidity. Customer deposits accounted for 94% of the funding base as of June 2026, up from 92.8% in December 2025.
Current and savings accounts represented 78.3% of customer deposits, compared with 73.7% in December 2024, supported by Sterling Bank’s efforts to mobilise retail deposits.
The group’s cost of funds consequently moderated to 4.9% as of June 2026, from 5.3% in December 2025.
Its deposit base was also well diversified. The single largest depositor and 20 largest depositors represented 4.9% and 17.4% of customer deposits, respectively, as of December 2025, compared with 7% and 20.3% a year earlier.
Sterling’s liquid-assets coverage of customer deposits stood at 50.7% at year-end 2025, while its regulatory liquidity ratio was 43.3%, comfortably above the minimum requirement of 30%.
“We expect these metrics to remain strong over the next 12 to 18 months, supported by further deposit mobilisation and conservative asset allocation,” GCR said.
The stable outlook reflects expectations that growth across the group’s subsidiaries will support its business profile. GCR also expects capitalisation, asset quality, funding and liquidity to remain sound throughout the outlook period. #GCR Affirms Sterling Bank’s Ratings With Stable Outlook# Sterling Bank SPV Bond Gets Indicative Rating, Outlook Stable
