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Agusto & Co. maintains an “A-” rating for Union Bank of Nigeria Plc

Rating Release

Agusto & Co. maintains an “A-” rating for Union Bank of Nigeria Plc.

The rating expires on 30 June 2020.

The rating assigned to Union Bank of Nigeria Plc (‘UBN’ or ‘the Bank’) reflects its good brand equity and shareholders’ support that has upheld capitalisation over the years. The rating recognizes a significant decline (65.2% year on year) in the Bank’s impaired credits on the back of major write offs and some repayments during the year. UBN maintained a good liquidity profile and displayed good refinancing capacity as evidenced in the 165% subscription of its debut bond issuance in 2018. However, the assigned rating is constrained by subpar profitability and declining market share across major indicators. We believe there are lurking legacy issues in UBN’s loan book that could impair asset quality and future earnings. The fragile macroeconomic environment and tightened regulatory oversight also threaten performance in the near term.

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.