International
Rating Agency, Standard and Poor’s (S&P) assigned its ‘B’ long
term and ‘B’ short term global scale counterparty credit ratings to
the United Bank for Africa Plc (UBA).
These ratings on the pan African
financial institution, United Bank for Africa (UBA) Plc, are at par with
S&P ratings on the Nigerian Sovereign. More so, S&P’s ‘B’
rating is the highest rating currently assigned to any
Nigerian-based financial institution, thus reinforcing the respectable
quality and strength of UBA, the third largest Nigerian-based bank by
total assets, deposits and profits.
The
rating agency noted that UBA’s market position is supported by its good
franchise in the corporate and retail segments in Nigeria as well as
geographic diversification, with operations
in nineteen African countries (Nigeria inclusive). More so, UBA is the
only West-African bank with operations in the United States, in addition
to its presence in the United Kingdom and France. Recognizing the
strong profitability and capitalization of UBA,
S&P noted; “We expect that UBA’s earnings will be resilient despite
the economic slowdown in Nigeria. We believe the bank’s capital and
earnings under our risk adjusted capital and earnings framework will
remain moderate over the next 12-18 months, with its
capital adequacy ratio remaining well above minimum regulatory
requirements.”
rating agency noted that UBA’s market position is supported by its good
franchise in the corporate and retail segments in Nigeria as well as
geographic diversification, with operations
in nineteen African countries (Nigeria inclusive). More so, UBA is the
only West-African bank with operations in the United States, in addition
to its presence in the United Kingdom and France. Recognizing the
strong profitability and capitalization of UBA,
S&P noted; “We expect that UBA’s earnings will be resilient despite
the economic slowdown in Nigeria. We believe the bank’s capital and
earnings under our risk adjusted capital and earnings framework will
remain moderate over the next 12-18 months, with its
capital adequacy ratio remaining well above minimum regulatory
requirements.”
UBA’s
capital adequacy ratio was 19.7% at year-end 2016, which is well above
the regulatory minimum of 15%, and we believe it will remain stable over
the next 12-18 months. Notably, the well
capitalized position of UBA reflects its strong profitability as well
as the Bank’s sound and prudent risk management practice. S&P
assesses UBA’s risk position as adequate and posits that the ratings of
‘B’ reflects its expectation that the group will exhibit
broadly stable asset quality in the next 12 months. The global rating
agency anticipates that UBA’s credit losses will decline to about 1.0%
in
2017-2018.
capital adequacy ratio was 19.7% at year-end 2016, which is well above
the regulatory minimum of 15%, and we believe it will remain stable over
the next 12-18 months. Notably, the well
capitalized position of UBA reflects its strong profitability as well
as the Bank’s sound and prudent risk management practice. S&P
assesses UBA’s risk position as adequate and posits that the ratings of
‘B’ reflects its expectation that the group will exhibit
broadly stable asset quality in the next 12 months. The global rating
agency anticipates that UBA’s credit losses will decline to about 1.0%
in
2017-2018.
Reflecting
UBA’s continued market share gain in low cost, stable deposits, which
account for 79% of total customer deposits as at
31 December, 2016, UBA’s funding and liquidity continue to wax
stronger, as reflected in the average liquidity ratio of 42% in 2016,
amidst the tight market conditions in Nigeria. S&P considers the
bank’s funding to be above average and its
liquidity as adequate, owing to its stable and relatively low-cost,
retail-deposit-based funding profile. Despite tightening monetary policy
in Nigeria in 2015-2016, the bank has been able to maintain a stable
cost of funding at about 3.7% as of
December 31, 2016”. The Group reported a net stable funding ratio
of 143% as of the same date and exhibits one of the lowest levels of
loan leverage among Nigerian peers. Broad liquid assets covered short
term wholesale funding about 4x as
of the same date.
UBA’s continued market share gain in low cost, stable deposits, which
account for 79% of total customer deposits as at
31 December, 2016, UBA’s funding and liquidity continue to wax
stronger, as reflected in the average liquidity ratio of 42% in 2016,
amidst the tight market conditions in Nigeria. S&P considers the
bank’s funding to be above average and its
liquidity as adequate, owing to its stable and relatively low-cost,
retail-deposit-based funding profile. Despite tightening monetary policy
in Nigeria in 2015-2016, the bank has been able to maintain a stable
cost of funding at about 3.7% as of
December 31, 2016”. The Group reported a net stable funding ratio
of 143% as of the same date and exhibits one of the lowest levels of
loan leverage among Nigerian peers. Broad liquid assets covered short
term wholesale funding about 4x as
of the same date.
United
Bank for Africa Plc is a leading Pan-African financial institution,
offering banking services to more than fourteen million customers across
over 1,000 business offices and customer
touch points in 19 African countries. With presence in New York, London
and Paris, UBA is connecting people and businesses across Africa
through retail, commercial and corporate banking, innovative cross
border payments and remittances, trade finance and ancillary
banking services
Bank for Africa Plc is a leading Pan-African financial institution,
offering banking services to more than fourteen million customers across
over 1,000 business offices and customer
touch points in 19 African countries. With presence in New York, London
and Paris, UBA is connecting people and businesses across Africa
through retail, commercial and corporate banking, innovative cross
border payments and remittances, trade finance and ancillary
banking services