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Agusto & Co. assigns a “Bb-” rating to Unity Bank Plc

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.

This Rating Release is transmitted to you for the sole purpose of dissemination through your newspaper / magazine / agency. The rating release may be used by you in full or in part without changing the meaning or context thereof but with due credit to Agusto & Co.