By Natalia Lyn
Stima DT Sacco has been rated stable in the recent GCR ratings, with the agency affirming its long and short-term issuer ratings of BB(KE) and B(KE), respectively.
According to the rating agency, the positive ratings on Stima DT Sacco reflected its stable funding structure, intermediate capitalisation, adequate liquidity, and improved governance.
GCR latest also notes that the Sacco has sustained a moderate risk position and a limited competitive position in the context of the broader banking/financial institutions sector.
“The GCR Leverage ratio at 15.21% in FY20 places it at the top end of intermediate range of our criteria partly because of the continued higher dividend pay-outs compared to peers which have restrained the capital ratios,” notes the report.
“The current institutional assets to capital ratio and the core capital to total assets ratio offer buffers of 2.2% and 5.3% above the regulatory requirements. Positively, the core capital to deposits ratio of 19.3% is however 11.3% above the regulatory requirement of 8.0%.”
According to the international rating agency, Stima DT Sacco’s funding and liquidity is a favourable rating factor. The Sacco has access to stable funding in the form of non-withdrawable deposits, which form close to 77% of total customer deposits (Ksh 23.7bn).
“The Sacco is creating an over-the-counter market to enable members’ trade in its shares as these deposits cannot be withdrawn even when a member leaves the Sacco. The deposit book is diversified, with the top 20 depositors accounting for about.6.15% of total deposits,” states the report.
Despite the higher cost of funding with the Sacco sub-sector, Stima Sacco maintained higher liquidity, with the regulatory liquidity ratio at 65.93% at the end of Financial Year 2020, which is above the regulatory requirement of 15%.
GRC stated the outlook is stable, and the Sacco’s liquidity position is expected to remain adequate.
