Banking
Union Bank Asset Quality Significantly Weak—Fitch
By Dipo Olowookere
Foremost rating agency, Fitch Ratings, has disclosed that its assessment has shown significant weakness in Union Bank’s asset quality measures.
Fitch made this known in a statement issued last week, where it announced affirming Union Bank of Nigeria Plc’s Long-Term Issuer Default Rating (IDR) at ‘B-‘ with stable outlook.
In the statement, the rating firm said it also affirmed the bank’s Viability Rating (VR) at ‘b-‘ and Support Rating at ‘5’.
It said the Nigerian lender, which has a market share of about 4 percent, has IDRs, driven by its standalone creditworthiness, as defined by the VR, that are constrained by Nigeria’s operating environment and factor in a high impaired loans ratio, some weakness in loan loss reserve cover, which puts pressure on capital adequacy and performance metrics which, although improving, are still impacted by high loan impairment charges.
However, it noted that risk appetite is now lower and management was focusing on loan restructuring and recoveries.
Fitch said in Union Bank’s well-established brand helps to attract cheap retail deposits that make up 60 percent of its deposit funding.
It added that corporate lending represents around 70 percent of loans but Union Bank’s strategy is to establish itself as a leading mid-tier bank in Nigeria, developing deeper customer relationships particularly in the corporate and SME segments, and ultimately expand its retail lending capabilities.
This expansion is likely to be supported by shareholders, particularly Atlas Mara Limited, which owns around 21 percent of the bank, a financial company whose primary goal is to support retail banking across the African continent, the rating agency said.
During the initial years under new ownership (2011- 2015), risk appetite at Union Bank was high, Fitch pointed out, stressing that this resulted into a loan portfolio that is highly concentrated on the oil sector (38 percent of loans).
“Our assessment shows significant weakness in asset quality measures. Impaired loans represent around 9% -10% of gross loans.
In addition, the bank has a high level of non-performing and restructured loans not captured in the impaired loan ratio.
Loan loss reserve cover, at around 80% of impaired loans, exposes the bank to unexpected losses even after factoring in the availability of collateral for some large impaired loans,” Fitch said in the statement obtained by Business Post.
It said the lender’s management’s focus on recoveries and loan restructuring is showing positive initial signs but the sustainability of these trends will be assessed over time.
Union Bank’s margins compare favourably with peers’ and overall operating profit metrics are broadly in line with peers’. Operating profit reflects some pressure on efficiency ratios impacted by the cost of maintaining a large branch network and the impact of inflation, it said further.
Fitch noted that Union Bank’s funding profile is improving, pointing out that customer deposits are growing steadily, reliance on interbank deposits is declining and all public sector deposits have been repaid, in line with local requirements.
It further said Union Bank’s foreign currency (FC) liquidity position was tight in 2016 and, along with several Nigerian peers, and the bank restructured some trade finance obligations with international correspondent banks.
“These are being repaid in line with restructured terms, but our assessment is that the bank’s FC liquidity position remains tight. The bank’s history of accessing term FC funding under new management is limited to a small number of counterparts,” it said.
Fitch said in the statement that given asset quality challenges, capital ratios have become strained.
It pointed out that Union Bank raised N49.7 billion of Tier 1 capital in 4Q17 and it believes that prudential capital shortfalls have been addressed.
“However, capital levels may still not be commensurate with risk despite the capital injection, largely because unreserved impaired and non-performing loans still represent a high proportion of equity,” it stressed.
The statement said Union Bank’s National Ratings reflect the bank’s creditworthiness relative to the country’s best credit and to peers operating in that country.
“Fitch believes that sovereign support to Nigerian banks cannot be relied on given Nigeria’s (B+/Negative) weak ability to provide support, particularly in FC. In addition, there are no clear messages from the authorities regarding their willingness to support the banking system.
“Therefore, the Support Rating Floor of all Nigerian banks is at ‘No Floor’ and all Support Ratings are at ‘5’.
“This reflects our view that senior creditors cannot rely on receiving full and timely extraordinary support from the Nigerian sovereign if any of the banks become non-viable.
“The bank’s IDRs, National Ratings and VR are primarily sensitive to either improvements or deterioration in asset quality and capital adequacy. Given the extent of Union’s asset quality pressures, upside is limited at present,” the rating company disclosed.
By Modupe Gbadeyanka
In recognition of its strategic leadership in advancing the growth and resilience of small and medium-sized enterprises (SMEs), Union Bank of Nigeria Plc has been honoured by the Association of Small Business Owners of Nigeria (ASBON).
The lender was rewarded by the group for its suite of solutions designed to enable business expansion and long-term value creation.
At the Nigeria National SME Business Awards, held recently in Lagos, Union Bank was given the Best SME Growth Banking Initiatives Award for 2025.
The ceremony was organised by ASBON in partnership with the Lagos State government through the Ministry of Commerce, Cooperatives, Trade and Investment.
The event convened stakeholders from the public and private sectors to recognise individuals and organisations driving meaningful impact across Nigeria’s SME ecosystem.
Receiving the award on behalf of the bank, its Head of SME Segment, Mr Ayokunnumi Abraham, described the recognition as a strong endorsement of the organisation’s commitment to supporting small and medium-sized businesses.
“We are honoured to receive this recognition, which reflects Union Bank’s continued commitment to helping SMEs grow by making banking simpler, faster, and more accessible.
“Through enhancements to our specialised platforms such as Union360, we have meaningfully reduced the time it takes for businesses to come on board and begin transacting.
“These improvements have shortened onboarding, increased digital adoption among our SME customers, and supported the acquisition of new business clients. Our focus remains on delivering practical solutions that help Nigerian businesses thrive,” he stated.
By Modupe Gbadeyanka
The stellar contributions of Polaris Bank Limited to youth employment, talent development, and workforce empowerment across Nigeria have not gone unnoticed, as the company was recently recognised at an event in Lagos.
At the 2026 Jobberman Partners’ Convening, the financial institution was bestowed with the Private Sector Champion Award.
The award recognises private sector organisations that have demonstrated exceptional commitment and leadership in advancing youth employability through impactful recruitment initiatives, graduate trainee programmes, executive hiring support, candidate assessment programmes, and strategic partnerships that create sustainable career opportunities for young Nigerians.
Themed From Impact to Action: Collectively Designing the Future of Youth Employment in Nigeria, the convening focused on fostering collaboration between the private sector and other stakeholders to expand access to meaningful employment opportunities and equip young Nigerians with the skills and opportunities required to succeed in an evolving economy.
On the recognition, Jobberman commended Polaris Bank for consistently going beyond transactional partnerships to deliver measurable impact within Nigeria’s employment ecosystem. The renowned recruitment firm described Polaris Bank as a credible and purpose-driven institution committed to advancing youth employability and supporting the future of work in Nigeria.
The Head of Talent Management at Polaris Bank, Ms Cynthia Sanyaolu, reaffirmed the lender’s commitment to empowering young Nigerians and strengthening the nation’s workforce through strategic people-focused initiatives designed to create long-term economic and social impact.
“This recognition reflects Polaris Bank’s unwavering belief in the potential of the Nigerian youths and our commitment to building platforms that enable them to thrive professionally and economically.
“At Polaris Bank, we see talent development and youth empowerment as critical drivers of national growth and sustainable development,” she stated.
Over the years, Polaris Bank has continued to invest in initiatives that promote learning, career growth, workforce inclusion, and economic empowerment.
Through strategic Graduate Trainee recruitment programmes via its flagship Polaris Graduate Intensive Training (PGIT) and Polaris Tech Ignite Training (TechIGNITE), among other talent development initiatives, and collaborative partnerships, the bank remains committed to supporting the next generation of Nigerian professionals while contributing to national development.
By Aduragbemi Omiyale
Plans are underway by Ecobank Transnational Incorporated (ETI) to approach the international debt market for a capital raise.
The parent company of the Ecobank Group intends to use proceeds from the proposed exercise to refinance “the concurrent any-and-all tender offer of the ETI $350 million 8.750 per cent tier 2 notes due June 2031.”
However, the issuance of the notes is subject to prevailing market conditions and the conclusion of the necessary transaction documentation, a statement signed by the organisation’s chief financial officer, Mr Ayo Adepoju, stressed.
After issuance, the debt instrument may be listed on the London Stock Exchange, with the expectation that the bonds will be traded on its regulated market.
Ecobank noted that it would allocate an amount equivalent to the full net proceeds of the issue of the notes to finance or refinance, in part or in full, new and/or existing eligible assets as described in its Green Bond Framework (Ecobank-Sustainability), as amended and supplemented from time to time.
Ecobank, which has banking operations in 34 countries in Africa, is listed on the Nigerian Exchange (NGX) Limited, the Ghana Stock Exchange and the Bourse Régionale des Valeurs Mobilières (Stock Exchanges).
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