UBA gets S&P ‘B/B’ ratings
International Rating Agency, Standard and Poor’s (S&P) has assigned its ‘B’ long term and ‘B’ short term global scale counterparty credit ratings to the United Bank of Africa Plc (UBA).
S&P’s ‘B’ rating is the highest rating currently assigned to any Nigerian-based financial institution, which reinforces the respectable quality and strength of UBA Plc, the third largest Nigerian-based bank by total assets, deposits and profits.
According to the rating agency, 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.
S&P’s added that 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 said: “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 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’ reflect 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.
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