FITCH RATES UNION BANK HIGHER
Fitch Global Ratings, a foremost international rating Agency, has assigned Union Bank of Nigeria PLC National Long and Short-term Ratings of ‘A+(nga)’ and ‘F1(nga)’ respectively, as well as Issuer Default Rating (“IDR”) ‘B+’ with a stable outlook.
The Agency explained that the “F1” rating indicates Union Bank’s “strongest capacity for timely payment of financial commitments”.
The report stated that IDR, short-term, national and support ratings reflect the probability of support for Union Bank in case of need from the Nigerian authorities. It said Union Bank’s well-established domestic franchise would mean a high level of willingness to support but the propensity was limited by the ‘BB-IDR’ assigned to Nigeria.
Fitch noted that the Bank would report robust earnings growth during the 2007 financial year, owing to the continued improvement in economic activities and buoyant credit demand. It said that improved depositor confidence caused the Bank’s total deposits to rise by 21 per cent year-on-year to N411.5 billion during the 2006 financial year, while it considers market risk to be low and liquidity levels adequate.
The Agency also acknowledged that Union Bank’s initiatives to improve its Information and Communication Technology (ICT) as well as risk and control structures would help to alleviate operational risk pressures.
It further noted that Union Bank is a Nigerian-listed universal bank, established 90 years ago with an extensive branch network through which it extends universal banking services and is one of the four largest banks in Nigeria in terms of assets, with a strong banking franchise.
Union Bank has overtime developed into the largest financial supermarket in the country, with viable subsidiaries, specializing in mortgages, insurance, trusteeship, stockbroking, property development/management and share registration. Each of these subsidiaries is a leader in its relevant sub-sector and contributing substantially to the Group’s gross earnings.
The Agency explained that the “F1” rating indicates Union Bank’s “strongest capacity for timely payment of financial commitments”.
The report stated that IDR, short-term, national and support ratings reflect the probability of support for Union Bank in case of need from the Nigerian authorities. It said Union Bank’s well-established domestic franchise would mean a high level of willingness to support but the propensity was limited by the ‘BB-IDR’ assigned to Nigeria.
Fitch noted that the Bank would report robust earnings growth during the 2007 financial year, owing to the continued improvement in economic activities and buoyant credit demand. It said that improved depositor confidence caused the Bank’s total deposits to rise by 21 per cent year-on-year to N411.5 billion during the 2006 financial year, while it considers market risk to be low and liquidity levels adequate.
The Agency also acknowledged that Union Bank’s initiatives to improve its Information and Communication Technology (ICT) as well as risk and control structures would help to alleviate operational risk pressures.
It further noted that Union Bank is a Nigerian-listed universal bank, established 90 years ago with an extensive branch network through which it extends universal banking services and is one of the four largest banks in Nigeria in terms of assets, with a strong banking franchise.
Union Bank has overtime developed into the largest financial supermarket in the country, with viable subsidiaries, specializing in mortgages, insurance, trusteeship, stockbroking, property development/management and share registration. Each of these subsidiaries is a leader in its relevant sub-sector and contributing substantially to the Group’s gross earnings.
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