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S&P Assigns ‘B/B’ Ratings, Stable Outlook on UBA

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International Rating Agency, Standard and Poor’s (S&P) assigned  its ‘B’ long term and ‘B’ short term global scale counterparty credit ratings to the United Bank for Africa Plc (UBA).

These ratings on the pan African financial institution, United Bank for Africa (UBA) Plc, are at par with S&P ratings on the Nigerian Sovereign.

More so, S&P’s ‘B’ rating is the highest rating currently assigned to any Nigerian-based financial institution, thus reinforcing the respectable quality and strength of UBA, the third largest Nigerian-based bank by total assets, deposits and profits.

The rating agency noted that 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 (Nigeria inclusive).

More so, 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 noted; “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 we believe 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’ reflects 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.

Reflecting UBA’s continued market share gain in low cost, stable deposits, which account for 79% of total customer deposits as at 31 December, 2016, UBA’s funding and liquidity continue to wax stronger, as reflected in the average liquidity ratio of 42% in 2016, amidst the tight market conditions in Nigeria.

S&P considers the bank’s funding to be above average and its liquidity as adequate, owing to its stable and relatively low-cost, retail-deposit-based funding profile.

Despite tightening monetary policy in Nigeria in 2015-2016, the bank has been able to maintain a stable cost of funding at about 3.7% as of December 31, 2016”.

The Group reported a net stable funding ratio of 143% as of the same date and exhibits one of the lowest levels of loan leverage among Nigerian peers. Broad liquid assets covered short term wholesale funding about 4x as of the same date. 

United Bank for Africa Plc is a leading Pan-African financial institution, offering banking services to more than fourteen million customers across over 1,000 business offices and customer touch points in 19 African countries.

With presence in New York, London and Paris, UBA is connecting people and businesses across Africa through retail, commercial and corporate banking, innovative cross border payments and remittances, trade finance and ancillary banking services


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E-Financial

Lagos State Appoints MoneyMaster as Payment Partner for “Ounje Eko” Programme

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“Ounje Eko”, the food price discount initiative of the Lagos State Government, has appointed leading payment service bank, MoneyMaster Payment Service Bank Limited (MMPSB), as its collaborator in the bid to ensure ease of payments at the market.

MoneyMaster is one of the Central Bank of Nigeria-licensed Payment Service Banks (PSBs) to promote financial inclusion across Nigeria.

Under the partnership, MMPSB will apply its cutting-edge payment solution to engender easy payment and reconciliation in order to make   the experiences of Lagosians who will be getting their food supplies from the markets pleasurable. Its payment solution is also all-encompassing and ensures real time value to payment destinations.

The mobile bank was appointed as the collection and payment partner for “Ounje Eko” Food Markets programme which is a government initiative serving the five divisions of Lagos State. Consequent on this, MoneyMaster Payment Service Bank will collect payments in 57 LCDAs in the state.

The partnership gives credence to the quality of payment solutions that MoneyMaster is reputed for in its services to its growing business clientele in private and public sectors.

 


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E-Financial

CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

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Central Bank of Nigeria (CBN), is investigating irregular foreign exchange transactions and forward contracts valued at approximately $2.4 billion.

CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

The  inquiry follows an extensive audit by Deloitte, which scrutinized $7 billion in dollar debts accumulated under the bank’s previous leadership.

In the aftermath of the 294th Monetary Policy Committee meeting in Abuja, Yemi Cardoso, governor of CBN,  disclosed to journalists that the investigation, supported by the Economic and Financial Crimes Commission, among other security bodies, aims to clarify the legitimacy of these FX allocations identified as problematic by the audit.

“It was determined that a number of these transactions did not qualify…they were outright illegal. The law enforcement agencies are now looking into those transactions that as far as we are concerned, are not valid to be paid,” Cardoso detailed, emphasizing the unlawful nature of these forex deals.

The crux of the investigation lies in the audit findings that a significant portion of the scrutinized transactions lacked proper documentation and, in many instances, were deemed outright illegal.

However, the unfolding investigation has raised concerns within the organized private sector, with some entities contemplating legal action against commercial banks for unresolved forex bids.

Despite these tensions, Governor Cardoso reassures that the foreign exchange market remains open and transparent, inviting stakeholders to address their forex needs through the official channels.

Furthermore, Cardoso clarified the distribution of fertilizers to farmers as a one-off measure and not indicative of a shift back to direct interventions by the CBN, underscoring a commitment to strategic, regulatory governance rather than direct market involvement.

 

 

 

 

 

 

 

 


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CBN Urges Banks to Expedite Action on Recapitalisation

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Central Bank of Nigeria (CBN) has directed deposit money banks in the country to expedite action to increase their capital base from the current ₦25bn.

CBN Urges Banks to Expedite Action on Recapitalisation

Olayemi Cardoso, governor of CBN

Olayemi Cardoso, governor of CBN, stated this during the apex bank’s 294th meeting of the Monetary Policy Committee (MPC) on Tuesday in Abuja, when the MPC hiked the interest rate by 22.75% to 24.75%.

The apex bank chief said the MPC examined developments in the banking sector and expressed satisfaction that the industry remained stable. The committee, however, said to guard against risk, commercial banks in the country should accelerate their recapitalisation efforts.

Cardoso said, “The MPC also reviewed developments in the banking system and noted that the industry remains safe, sound, and stable. The committee thus called on the bank to sustain its surveillance and ensure compliance of banks with existing regulatory and macro-potential guidelines.

“The MPC also enjoined the banks to expedite actions on the recapitalisation of banks to strengthen the system against potential risks in an increasingly globalised world.”

 

 

 

 


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