Rating Release
Agusto & Co. affirms United Bank for Africa Plc’s ‘Aa-’ rating and a “2” ESG Score.
The rating expires on 31 December 2023.
Agusto & Co. hereby maintains the ‘Aa-’ rating assigned to United Bank for Africa Plc (‘UBA’ or ‘the Bank’) and assigns an ESG score of ‘2’ which denotes that environment, social and governance issues have minimal impact on the Bank’s credit risk. The rating reflects UBA’s Pan-African franchise, which protects it from the macroeconomic headwinds in Nigeria (to an extent) and supports its ability to refinance in the international financial markets. The rating also considered the Bank’s good asset quality, good liquidity, strong ability to refinance and significant market share. We have also considered UBA’s strong affinity to retail customers and wide branch network. However, offsetting these positive factors are the comparably high cost-to-income ratio vis-à-vis other tier 1 banks, exposure to power loans with cash flow constraints and obligor concentration in the loan book. Also factored into the rating is the impact of the fragile macroeconomic environment on Nigerian businesses.