Global rating firm, Fitch Ratings has upgraded United Bank for Africa (UBA) Plc Long Term Issuer Default Rating (IDR) to ‘B+’, with stable outlook.
The foremost rating agency also upgraded the Viability Rating of the Pan-African bank to “b+” from “b”. The rating upgrade comes on the back of consistent improvement in financial performance metrics, funding, liquidity and capitalization.
According to Fitch, “UBA is also Nigeria’s most international bank, operating in 20 other sub-Saharan African countries. Its objective is to operate as a Pan-African commercial bank. Our assessment is that geographic diversification is credit positive because it provides growth opportunities and can reduce exposure to Nigeria’s cyclical economic growth trends.”
In assessing the Group’s funding and liquidity profile, Fitch reported, “UBA’s local currency funding profile is a rating strength. Its loans/deposits ratio (57% at end-1H18) is low compared with peers (69%). The deposit base is well diversified by single customer and retail deposits represent approximately one-third of customer deposits, which is higher than the average for rated peers. UBA’s digital offerings continue to attract deposit inflows. Local currency liquidity ratios are comfortable and the issue of a USD500 million senior medium term bond on the international capital markets in June 2017 eased pressure on the group’s overall foreign currency liquidity position.”
