Union bank

Fitch Union Bank B- rate, outlook stable

Fitch Ratings has confirmed Union Bank’s long-term issuer default rating of ‘B- with a stable outlook.

A statement titled “Fitch says Union Bank is at ‘B-‘, outlook stable,” said this followed a full rating process.

The lender’s long-term national rating was also upgraded from “BBB- (nga)” to “BBB (nga), and its national short-term rating was upgraded to“ F2 (nga) ”from“ F3 (nga) “.

According to the rating agency, the upturn in Union Bank’s national ratings reflected the lender’s increased creditworthiness relative to other Nigerian issuers and the relative strength of its funding and liquidity profile.

According to the statement, the rating report released by Fitch stated that “Union’s long-term IDR was driven by its intrinsic creditworthiness, as defined by its ‘b-‘ sustainability rating.

“The VR also reflects Union’s focus and sensitivity to risks associated with the Nigerian operating environment and moderate deductibility.

“This is balanced by a stable funding and liquidity profile and adequate profitability for the risk profile of the bank.

“The stable outlook reflects Fitch’s view that risks to Union’s credit profile are factored in at the current rating level, with sufficient margin, in our baseline scenario, to absorb the fallout from pressures from operating environment. “

The agency also explained, “Union Bank’s national ratings reflect its creditworthiness relative to other issuers in Nigeria and are driven by its self-reliant strength.

“The Union’s long-term national credit rating upgrade reflects its increased creditworthiness compared to other Nigerian issuers.

“Its short-term national rating is the higher of the two possible options for a long-term” BBB (nga) “national rating by Fitch criteria, reflecting the relative strength of the bank’s funding and liquidity profile, which which reduces the vulnerability to default on its short-term local currency obligations in Nigeria.

According to the statement, the Union’s total capital adequacy ratio of 16.1% at the end of 1H21 was slightly above its minimum regulatory requirement of 15% and was backed by qualifying subordinated debt of N30 billion. (equivalent to 17% of the eligible capital), maturing in 2029.

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