Moody’s announces completion of a periodic review of ratings of Union Bank of Nigeria plc

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Moody’s Investors Service (“Moody’s”) has completed a periodic review of the ratings of Union Bank of Nigeria plc and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody’s reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers.

The review did not involve a rating committee. Since 1 January 2019, Moody’s practice has been to issue a press release following each periodic review to announce its completion.

This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. For any credit ratings referenced in this publication, please see the rating tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and the rating history.

Key rating considerations are summarized below.

Union Bank of Nigeria Plc’s (Union) B2 long-term local currency deposit rating is one notch above its b3 baseline credit assessment (BCA).

Union’s b3 BCA reflects the bank’s high asset risks due to elevated concentration risks amid Nigeria’s difficult operating environment that is exacerbated by the coronavirus pandemic and depressed oil prices and its modest profitability. These challenges are counterbalanced by the bank’s stable deposit-based funding profile and satisfactory local currency liquidity that is supported by the bank’s solid retail deposit franchise.

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This document summarizes Moody’s view as of the publication date and will not be updated until the next periodic review announcement, which will incorporate material changes in credit circumstances (if any) during the intervening period.

The principal methodology used for this review was the Banks Methodology published in November 2019. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

This announcement applies only to EU rated and EU endorsed ratings. Non-EU rated and non-EU endorsed ratings may be referenced above to the extent necessary if they are part of the same analytical unit.

This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the rating tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and the rating history.