Fitch places Union Bank rating watch as new management assumes office in Nigeria

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Fitch Ratings has placed Union Bank of Nigeria Plc’s (UBN) Issuer Default Ratings (IDRs), Viability Rating (VR) and National Ratings on Rating Watch Negative (RWN).

This is coming as the bank reassured its partners, customers and critical stakeholders of continued excellent service and seamless operations, following the recent appointment of its new Managing Director/Chief Executive Officer, Yetunde Oni, by the Central Bank of Nigeria (CBN).

Specifically, the RWN, according to Fitch, reflects the uncertainty surrounding the background to the CBN’s intervention, the potential for further regulatory actions and the negative implications for the bank’s standalone credit profile, particularly relating to corporate governance risks and liquidity pressures arising from potential funding instability.

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Fitch expects to resolve the RWN within six months once there is more certainty regarding the CBN’s intervention and the implications for UBN’s standalone credit profile.

A downgrade according to the agency, could be considered if there is further imposition of restrictive measures on the Union Bank’s activities, fines or other regulatory findings (such as weaker asset quality than initially reported by UBN), that would lead to large losses and erosion of the bank’s capital. The downgrade could also result from UBN’s funding instability, i.e. due to a deposit run or where additional liquidity sources become unavailable to the bank.

Fitch further stated that the ratings could be affirmed and removed from RWN if the bank’s continues to operate as normal under the new management in the medium term and there are no additional regulatory interventions or financial profile implications from the management replacement.

However, the bank has assured its customers that as a long-standing financial institution in the Nigerian banking industry, it will continue to provide top-quality services and products while operating under the best tenets of corporate governance as enshrined within the guidelines of the CBN.

Under its new leadership, the bank pledged to sustain and drive initiatives that will continue to enable customer success and increase positive business growth.

New Union Bank Managing Director Yetunde Oni promised to maintain its legacy as a proudly Nigerian institution steadfast in its commitment to enabling success for its robust customer base.

Speaking soon after her resumption, she said: “Union Bank is an iconic financial institution with over 106 years of history providing top banking services to the Nigerian people. Under my stewardship, we will maintain our proud heritage and continue to be part of the growth and the success story of Nigeria and its people for the foreseeable future.”

The bank also assured all its customers of smooth operations in its vast network of branches nationwide and unhindered access to its top-notch, technologically innovative products and services. Depositors were also assured of the safety of their funds and urged to use their various channels for inquiries or assistance in resolving any issue.

Established in 1917 and listed on the Nigerian Stock Exchange in 1971, Union Bank of Nigeria Plc. is a household name and one of Nigeria’s long-standing and most respected financial institutions. The Bank is a trusted and recognisable brand with an extensive network of over 300 branches across Nigeria. The Bank currently offers a variety of banking services to both individual and corporate clients, including current, savings and deposit account services, funds transfer, foreign currency domiciliation, loans, overdrafts, equipment leasing and trade finance. The Bank also offers customers convenient electronic banking channels and products, including Online Banking, Mobile Banking, Debit Cards, ATMs, and POS Systems.

Maenwhile, the bank assured its customers that as a long-standing financial institution in the Nigerian banking industry, it will continue to provide top-quality services and products while operating under the best tenets of corporate governance as enshrined within the guidelines of the CBN.

Under its new leadership, the bank pledged to sustain and drive initiatives that will continue to enable customer success and increase positive business growth.

New Union Bank Managing Director Yetunde Oni promised to maintain its legacy as a proudly Nigerian institution steadfast in its commitment to enabling success for its robust customer base.