Rating Release

Agusto & Co. downgrades the rating assigned to Union Bank of Nigeria Plc to “Bbb”, with a stable outlook. 

The rating expires on 30 June 2025 

Agusto & Co. hereby downgrades the rating assigned to Union Bank of Nigeria Plc (‘UBN’ or ‘Union Bank’ or ‘the Bank’) to “Bbb” due to the weak capitalisation and lingering asset quality issues. Capitalisation is below our minimum benchmarks for a commercial bank with persistent depreciation of the domestic currency which continues to bloat risk-weighted assets. The obligor concentration in the loan book as well as the prevailing macroeconomic headwinds also contributed to the downgrade. Notwithstanding, the Bank’s profitability improved, the liquidity profile remained good and the new management team is experienced enough to supervise UBN’s turnaround in our view. A ‘4’ ESG score has been assigned, indicating that environmental, social, and governance issues have a material impact on the UBN’s credit risk.