Banking
GCR Affirms Union Bank’s National Scale Rating of BBB+(NG)
By Dipo Olowookere
The national scale ratings assigned to Union Bank of Nigeria Plc of BBB+(NG) and A2(NG) in the long and short term respectively have been affirmed by Global Credit Ratings.
Also, the firm announced last Thursday that the ratings are with stable outlook and that they remain valid until June 2018.
Commenting on the ratings, Global Credit Ratings disclosed that the rating took into consideration the lender’s successful capital raising exercise of N49.7 billion through a Rights Issue, which was concluded in December 2017, with 120 percent subscription.
While the bank’s capital adequacy ratio had declined to 13.3 percent at FY16 against the required minimum of 15 percent for international commercial banks, the newly raised capital is to be largely utilised to regularise the shortfall and support working capital.
Furthermore, the 20 percent over-subscription is considered a reflection of shareholders’ continuous support for the bank.
Union Bank’s gross non-performing loan (NPL) ratio rose from 6.9 percent at FY16 to 9.1 percent at 3Q FY17, becoming a major concern for the ratings.
In addition, per management, the increase in NPL was largely due to macro-economic pressures on businesses across the country, and its resultant effect on the loan book.
Nonetheless, cognisance is taken of the effort towards NPL recovery, as the bank reported N2 billion in recoveries at 3Q FY17, compared to N923 million recorded for the same period in FY16.
Union Bank’s regulatory liquidity ratio stood at 40.6 percent at 3Q FY17, against the regulatory minimum of 30 percent, while the liquid assets to short term funding ratio rose to 30.4 percent from 21.5 percent at FY16.
Performance based on unaudited 3Q FY17 results, reflect a pre-tax profit of N13.0 billion, representing 2.1 percent decline from the corresponding period in FY16.
Primarily driving the performance was an annualised 20.4 percent growth in interest income to N88.5 billion, but a similar rise in interest expense (up by an annualised 68.1 percent) constrained net interest income to N46.9 billion.
However, profitability was further enhanced by a decline in net impairment charge to N5.9 billion from N12.7 billion at 3Q FY16.
Operating expenses increased by 10.1 percent (which management attributed to inflationary pressure) from the 3Q FY16 position and as such the cost ratio rose to 72.2 percent from 66.2 percent at FY16.
Return on average equity and assets (ROaE and ROaA) stood relatively stable at 6.1 percent and 1.3 percent respectively.
GCR says it considers the capital raising exercise as rating positive. The appropriate deployment of capital and regularisation of capital adequacy metrics, sustained improvement in profitability, asset quality and liquidity measures, and a further strengthening of the bank’s competitive position in the domestic market, could lead to upward ratings migration.
However, a downward review of the rating may result from a further decline in asset quality and earnings metrics, high capital encumbrance by unreserved NPLs and tight liquidity.
By Dipo Olowookere
Ecobank Nigeria Limited has taken a significant step to ensure its customers get cheap personal loans by partnering with the Nigerian Consumer Credit Corporation (CrediCorp).
The service is available to civil servants and private-sector employees whose salaries are paid through Ecobank.
New customers can also benefit upon presentation of employer undertaking to pay subsequent salaries through Ecobank.
Starting this January, the initiative provides flexible repayment options and a streamlined loan application process.
These loans can be used to finance a variety of personal needs, including paying school fees, rent, maintenance costs, medical bills, car purchase and repairs, asset purchase, and more.
The loans come with affordable interest rates, a two-year term, and a repayment plan that ensures equal monthly instalments, including principal and interest, do not change throughout the life of the facility, regardless of the economic situation of the country.
According to the Head of Consumer Banking at Ecobank Nigeria, Ms Adeola Ogunyemi, the loans will provide salary earners, both in the public and private sectors, with better access to financial products.
“This collaboration is an excellent opportunity to serve our customers, and we believe it will improve the quality of life for many Nigerians.
“Eligible customers can use the loans to purchase electronics, solar systems, or CNG vehicle conversions, as well as for other essential expenses like school fees, rent, upkeep, medical bills, and car maintenance.
“We encourage working-class Nigerians to open an account with Ecobank to benefit from this initiative,” Ms Ogunyemi stated.
CrediCorp, a Development Finance Institution (DFI) established by the federal government, is focused on enhancing access to consumer credit for Nigeria’s workforce.
Under the partnership, CrediCorp will provide funds to Ecobank, for on-lending to qualified customers.
The arrangement covers personal loans, as well as asset financing for items like solar systems, home appliances, phones, laptops etc. and vehicle conversions to compressed natural gas (CNG).
Ecobank Nigeria is part of the Ecobank Group, a leading pan-African banking organization. The bank provides a full range of financial services to individuals, businesses, and institutions through its network of over 240 branches and 35,000 Xpress Point agencies across Nigeria.
By Modupe Gbadeyanka
No fewer than 131 customers of Wema Bank Plc will win N11 million in cash prize in the company’s 5 for 5 promo season 4 monthly draw fixed for Friday, January 24, 2025, in Warri, Delta State.
According to a statement from the lender, from the 131 customers, 80 of them will win N25,000 each, 40 will win N100,000 each, eight domiciliary account holders will win N250,000 each and three will get N1 million each, with one to be from Warri, venue of the event.
The 5 for 5 promo selects winners from the bank’s pool of active and transacting customers, via thoroughly regulated electronic live draws.
The first 3 seasons saw the Wema Bank 5 for 5 Promo disburse over N150 million to 2,378 Nigerians across the six geopolitical zones in Nigeria, and with the launch of Season 4 on October 1, 2024, Wema Bank raised the bar, setting aside a whopping N135 million for disbursement this season alone.
So far, over 1,000 Nigerians have won cash prizes in daily, weekly and monthly draws, with 540 customers winning in 55 daily draws, 550 customers winning in 11 weekly draws and 262 customers winning in 2 monthly draws; totalling over N27 million disbursed so far.
The third monthly draw of the season, which also happens to be the first monthly draw of 2025, is set to hold this January in Warri, and another 131 winners will emerge from the draw.
“The goal for us with the Wema Bank 5 for 5 promo is giving back, providing support and rewarding our loyal customers, it’s been one of the key means through which we say ‘thank you’ as a Bank, and four years strong so far, it’s only gotten better with each season.
“We made millionaires in December ahead of Christmas and it was heartwarming to hear from our amazing customers how instrumental these rewards were in sorting out some bills. Now, we are even more ready to kickstart 2025 on a millionaire note,” the chief executive of Wema Bank, Mr Moruf Oseni, said.
“As a tradition, the 5 for 5 Promo continues to tour different locations across the six geopolitical zones, however, our winners are always selected from across the country. So even though one of the millionaires will be from Warri where this draw will hold, there’s still room for two more millionaires and over 120 more winners of cash ranging from N25,000 to N250,000.
“The joy for us is in the smiles that are made, the stories that are positively impacted and the hope that these cash rewards bring to the winners; from students to small business owners, working professionals, and so on.
“We are all too familiar with the running ‘100 days of January’ reality that plagues a lot of us after the heavy spending that comes with December, so this draw is the perfect opportunity to support our customers beyond the daily and weekly draws that we hold every other weekday.
“I congratulate the winners in advance, and I encourage every new and existing Wema Bank customer to seize this opportunity and start transacting today. The 5 for 5 promo is as transparent as can be, so anyone can win, provided they meet the minimum requirements,” he added.
By Dipo Olowookere
The United Bank for Africa (UBA) Plc has completed its scheduled routine system maintenance on its card service.
The financial institution over the weekend informed its customers of a scheduled maintenance on its card service from 12 am to 5 am of Sunday, January 19, 2025.
Customers were told that the action could make them experience service disruption while using the UBA cards for financial transactions.
The lender said it was carrying out the maintenance for better service delivery, apologising for any issue they may encounter during the period.
“In line with our commitment to provide you with exceptional experience and to enable us to serve you better, we will be carrying out a scheduled routine maintenance on our card services.
“During this period, you may not be able to use your Debit & Credit Card. Please use our alternative channels, LEO, *919#, Mobile App or Internet Banking for transactions
“An update will be provided as soon as the maintenance is completed.
“We appreciate your understanding and apologize for any inconvenience this may cause. Please be assured that we are committed to providing you with excellent banking services,” the notice earlier sent to customers said.
After the completion of the process, UBA mailed another statement to customers, informing them they could use their cards without any issue.
“We are pleased to inform you that our scheduled routine system maintenance has been completed.
“You can now enjoy safer and quicker transactions on our card service.
“We regret any inconvenience you may have experienced, and assure you of our commitment to continuously provide you with excellent service,” the statement sighted by Business Post read.
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