GCR Affirms UBA Plc.’s B/AA+ Ratings with Stable Outlooks
GCR Ratings (GCR) has affirmed United Bank for Africa Plc’s (UBA) international scale long-term issuer rating of B. Concurrently, UBA’s national scale long and short-term issuer ratings have been affirmed at AA+(NG) and A1+(NG), respectively.
The outlooks on the ratings have been maintained as stable. GCR said the ratings reflect the consolidated credit profile of UBA group, comprising the bank and its subsidiaries operating across twenty African countries as well as international offices in the United Kingdom, the United States, France, and the United Arab Emirates.
GCR also highlighted that UBA ratings reflect the group’s strengthened capitalisation, strong competitive position, adequate liquidity and good risk position.
However, these strengths are partly offset by the weaker operating environments of the territories which anchor the group’s asset base and earnings, according to the ratings analysts.
The competitive position assessment remains a key rating strength, underpinned by the group’s strong brand franchise, and its extensive Pan-African and international presence across global trade and financial hubs, GCR said.
UBA group’s broad geographic diversification enhances its capacity to drive cross-border trade flows and positions it as a payment gateway in both the regional and international markets.
The bank ranks among the top five Nigerian financial institutions and is a domestic systemically important bank, with an estimated market share of 10.6% of the Nigerian banking sector’s assets.
Ratings analysts stated that its earnings quality has improved following the relative stability in foreign exchange rates and due to increased value propositions through digital channels.
Consequently, annuity-like income accounted for a higher 82.2% of operating revenue as of 30 June 2025 compared with 72.4% in 2024 and is expected to remain at strong levels over the next 12 to 18 months as the bank continues to digitalise its operations.
The group’s capitalisation further strengthened in 2025, following the additional equity injection of NGN234.3 billion through a rights issue to comply with the new capital requirement of NGN500 billion for international banks.
As a result, the GCR core capital ratio improved to 30.4% as of 30 June 2025 from 24.1% in 2024. Over the next 12 to 18 months, ratings analysts expect the GCR core ratio to range between 25% and 30%, balancing the projected growth in the loan portfolio and other expansion plans against the additional capital of N150 billion that is currently awaiting verification and approval by the Central Bank of Nigeria (CBN).
However, GCR Ratings analysts said they consider the loan loss reserve coverage of stage 3 loans at 48.0% as of June 2025 as against 73.3% in 2024, to be low.
The risk profile remains a positive rating factor, driven by the group’s conservative risk appetite for credit expansion and stringent underwriting practices. As of 30 June 2025, the bank fully resolved all its forbearance loans largely through reclassification and write-offs.
Consequently, the non-performing loan (NPL) ratio increased slightly to 6.2% as of 30 June 2025 from 6.0% in 31 December 2024 and remains above the regulatory tolerable limit of 5.0%.
Conversely, credit losses moderated to 0.9% in the year to 30 June 2025 from 4.0%. Although asset quality metrics remain susceptible to the challenging macroeconomic conditions across several African markets, GCR expects the group’s strengthened credit monitoring framework will continue to support the metrics at similar level over rating horizon.
For the group, funding and liquidity profile is considered to be sound, said GCR. The group is predominantly funded by customer deposits, which accounted for 85.4% of the funding base as of 30 June 2025 versus 84.1% in 2024.
UBA customer deposits grew by 47.0% to NGN21.9 trillion as of 31 December 2024 and further to NGN24.2 trillion as of 30 June 2025, driven by retail deposits mobilisation.
As a result, the current and savings account (CASA) deposits accounted for a considerable 86.2% of customer deposits as of June 2025. This supported a competitive cost of funds of 4.1% as of 30 June 2025.
Additionally, the deposit pool is well diversified, with the single and twenty largest depositors accounting for 2.4% and 10.2% of customer deposits respectively as of 30 June 2025.
GCR said the group maintains a sufficiently liquid book, with liquid assets covering wholesale funding and customer deposits by 11.4x and 64.7% respectively as of 31 December 2024.
Ratings analysts also view the foreign currency (FCY) liquidity to be sound, with FCY liquid assets covering 66.3% of total FCY liabilities as of 31 December 2024.
“The stable outlook reflects our expectations that the group will sustain a strong competitive position, on the back of a strong franchise and diverse product line.
“The capitalisation metrics are also expected to remain robust, underpinned by an additional equity injection. Asset quality metrics are expected to remain close to current levels, and as with peers, are vulnerable to the fragile macroeconomic environment,” GCR said. Lafarge Africa’s Q3 2025 Performance Fuels Price Surge
