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No change in Standard Bank’s support for Stanbic IBTC over FRCN sanction – Fitch

By on November 4, 2015

Fitch Ratings believes that the recent alleged irregularities raised by the Financial Reporting Council (FRC) into Stanbic IBTC Holdings Plc’s  financial reporting for 2013 and 2014, have not affected the propensity of its South African majority shareholder – Standard Bank Group Limited (SBG), to its subsidiary  if required.

The ratings agency explained in a statement yesterday that Stanbic IBTC’s and its holding company’s national ratings were based on the moderate likelihood of support that the bank and the holding company derive from SBG.

SBG has a majority 53.25 per cent stake in Stanbic IBTC Holdings. The issuer operates a holding company structure, whereby Stanbic IBTC Holdings is the holding company of Stanbic IBTC Limited, the group’s main operating company.

Fitch believes that SBG’s support would extend equally to the bank and the holding company.

“Following the allegations, the Central Bank of Nigeria (CBN) has ordered Stanbic IBTC to respond to the points raised by the FRC. Fitch understands that so far no restatement of the 2013 and 2014 financial statements have been required by CBN.

“The allegations cover several different areas of the financial statements, but centre upon alleged erroneous accruals relating to intra-group charges and license fees due to SBG for the use of banking application software- amounting to between N1 billion and N2 billion annually – as well as the alleged concealment of these expenses within the financial statements,”  the ratings agency stated.

Meanwhile, hearing in a suit filed by Stanbic IBTC Holdings Plc against FRCN before a Federal High Court in Lagos was stalled yesterday due to the absence of the trial judge,  Justice Ibrahim Buba.

Though no reason was given for the absence of the judge but the registrar said the suit had now been fixed for tomorrow for mention.

FRCN had last week sanctioned Stanbic IBTC over its audited accounts for 2013 and 2014 and temporarily suspended the Financial Reporting Numbers of the bank’s chairman, Mr. Atedo Peterside, and its chief executive, Mrs. Sola David-Botha.

The Council also barred them from vouching for the integrity of any financial statements in Nigeria.

FRCN also suspended two other directors – Mr. Arthur Oginga and Dr. Daru Owei – for attesting to what it termed the “misleading” 2013 and 2014 financial accounts of the bank, as well as Ayodele Othihiwa of KPMG Professional Services for his firm’s alleged complicity in the infractions highlighted in the financial reports for the two-year period.

 

[ThisDay]