Fitch Ratings has revised Stanbic Bank Kenya’s Outlook to negative from stable and affirmed the bank’s long term issuer default rating(IDR) at ‘BB-‘
This downgrade follows a similar action against the lender’s parent company South African-based Standard Bank Group Limited to BB/Negative from BB+ Negative. The rating agency views that the Kenyan business should be one notch below Standard Bank Group’s if country risks allowed.
Fitch mentioned the possibility that Stanbic Bank Kenya will require financial support from the parent company, which has a 69 per cent indirect shareholding in the bank.
The Kenyan subsidiary of Standard Bank Group is viewed as strategically important to the Group’s Pan African expansion strategy.
Considered the largest economy in East Africa, Kenya offers an important growth opportunity and market for the Standard Bank Group. SBG has high-level connections with the Kenyan business, including its participation in the management of SBK, use of similar products, risk policies and processes as well as systems and branding.
In 2019, Stanbic Bank Kenya accounted for 1.8 percent of the consolidated Standard Bank Group balance sheet.