Union Bank To Maintain Focus On Retail Banking, SMEs

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GCR Ratings has affirmed the national scale issue rating assigned to Union Bank of Nigeria Plc.’s series 2 Bonds of BBB+ (NG) with the outlook revised to stable from negative. In a new rating report, the emerging market focused rating agency stated that the series 2 bonds were issued under Union Bank of Nigeria Plc.’s N100 billion debt issuance programme on September 7, 2018. “The issuer raised an aggregate sum of N6.3 billion in Series 2 bonds issuance, at a fixed annual interest rate of 15.75%…with a tenor of seven years, and a legal maturity date of September 3, 2025”, GCR noted. It said the series 2 Bonds constitute senior, direct, irrevocable, and unsubordinated obligations of the Issuer, and shall rank pari passu without any preference among themselves and all unsecured and unsubordinated indebtedness and monetary obligations of the Issuer, present and future, but in the event of insolvency, only to the extent permitted by applicable laws relating to creditors’ rights. Being senior unsecured debt, GCR ratings hinted the bond bears the same probability of default as the Issuer and would reflect similar recovery prospects to senior unsecured creditors in the event of a default. According to the periodic performance reports provided to GCR by the Trustees to the Bondholders, dated July 16, 2021, the Issuer has been meeting all its obligations on the bonds issued on a timely basis thus far, with no breach of negative pledges/covenants by the issuer. “The issuer, UBN, is a mid-sized commercial bank in the Nigerian banking industry. The bank’s national scale long term rating was affirmed at BBB+ (NG) with a stable outlook in September 2021. “The ratings assigned balances the bank’s good franchise strength, strong funding structure and adequate liquidity position against the modest levels of capitalisation, high loan book concentrations, and moderate asset quality”. The rating report reads that the stable outlook reflects GCR’s opinion that UBN’s financial profile will remain stable over the rating horizon. “We expect to see the bank’s credit losses and impaired loans ratio maintained below the industry averages of 3% and 6% respectively over the next 12-18 months, with no adverse credit migration especially from the watch list exposures”.

In a bid to remain the most trusted partner to Nigerian enterprises, Union Bank of Nigeria Plc (UBN) has stated that it would continue to maintain its focus on retail banking and support for SMEs.

Its Chief Brand & Marketing Officer, Ogochukwu Ekezie-Ekaidem, said this at an interactive session with senior officials of the bank via zoom. Ekezie-Ekaidem explained that the bank did everything to stay open to its customers during the COVID-19 pandemic, adding that post-lockdown, it embarked on more strategies to become flexible enough to interact with its customers.

“We have a new leadership under Mr. Emeka Okonkwo, as new bank Chief Executive Officer and so we are more than ready to remain Nigeria’s most trusted partner. We recognize that the economy is a bit sluggish, trying to recover gradually from the recession and that is why we are focused on retail banking and SMEs and we will continue to grow brands and offerings that customers need.

“We are committed to empowering the SMEs segment to enable them to access funds and create values. We are trying to make sure we cluster as many of them to create value. It is important to note that it is not only loans that they require, they ask for other needs like advice, access to market, advisory, and others. On the banking side, we have continued to push forward under the new CEO, We have structured our businesses in such a way that gives autonomy to our regions”, She explained.

She also said that the bank intends to do more in the lives of its customers to ensure the value of the brand keeps improving.

She revealed that the bank’s loan book is being strictly monitored and the bank is working on ways to improve it.

On the rise in cybercrime, the bank’s spokesperson noted that it was a global issue, exacerbated by digitalization.

“What we as a bank have done is to initiate systems to ensure we find out about these breaches and that is a good thing because our protection systems are working. We want to be ahead of the criminals by upgrading our systems regularly.”

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