Rating Release
Agusto & Co. assigns a “Bb-” rating to Unity Bank Plc
The rating expires on 30 June 2020.
The rating assigned to Unity Bank Plc (‘Unity Bank’ or the ‘Bank’) is underpinned by satisfactory liquidity position, a nil impaired credit position, brand strength in the Northern region of Nigeria and regulatory support. The Central Bank of Nigeria (CBN) waived the Bank’s compliance with regulatory provision for cash reserve requirement, capital adequacy ratio, loan-to-deposit ratio and also extended borrowing at a subsidised interest rate to Unity Bank. In addition, the Asset Management Corporation of Nigeria (AMCON), the government-owned toxic asset management company, is the Bank’s largest shareholder. Offsetting the positive factors are the Bank’s negative capital base, concentration in the loan book, low staff productivity and the fragile macroeconomic environment. However, we note positively, various initiatives introduced by the management team to reposition Unity Bank as the preferred retail bank, in a highly competitive industry by 2023.
The Central Bank of Nigeria (CBN) waived the Bank’s compliance with regulatory provision for cash reserve requirement, capital adequacy ratio, loan-to-deposit ratio and also extended borrowing at a subsidised interest rate to Unity Bank.
In addition, the Asset Management Corporation of Nigeria (AMCON), the government-owned toxic asset management company, is the Bank’s largest shareholder. Offsetting the positive factors are the Bank’s negative capital base, concentration in the loan book, low staff productivity and the fragile macroeconomic environment. However, we note positively, various initiatives introduced by the management team to reposition Unity Bank as the preferred retail bank, in a highly competitive industry by 2023.