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 Adedapo Adesanya
The Central Bank of Nigeria (CBN) has directed banks and other financial institutions to submit monthly reports on failed electronic transactions across digital channels, as part of new compliance measures introduced in its revised Guide to Charges.
The directive was contained in a circular titled Exposure Draft of the Guide to Charges by Banks and Other Financial Institutions in Nigeria, 2026 (The Guide) and signed by the Director of the Financial Policy and Regulation Department, Mrs Rita Sike.
According to the apex bank, Chief Compliance Officers and Heads of Information Technology in financial institutions are required to jointly render electronic reports of all failed transactions conducted via Automated Teller Machines, Point of Sale terminals, mobile channels, web platforms, and other electronic systems.
The circular read, “The Chief Compliance Officer and Head Information Technology shall jointly render monthly reports electronically, of all failed electronic transactions via various e-channels (ATM, PoS, mobile, web/internet and related channels) that originate or terminate in the institution.”
The reports are to be submitted to designated CBN email addresses, reinforcing the regulator’s push for stricter monitoring of service failures across the banking system.
Beyond the reporting requirement, the CBN also introduced broader accountability measures, placing responsibility on top management of financial institutions to ensure strict adherence to the new guide.
Executive Compliance Officers or Managing Directors are mandated to cascade compliance expectations across all business units and ensure that banking systems are configured to apply only approved charges.
Specifically, the regulator directed that Heads of Information Technology must ensure that “all systems configurations only capture and allow posting of charges as permitted and described in this Guide,” while Chief Compliance Officers are to monitor strict compliance with the framework.
The revised guide, effective May 1, 2026, replaces the 2020 version and provides a comprehensive framework for charges across banking and other financial services.
The CBN explained that the review was aimed at promoting a safe and sound financial system, encouraging innovation, and expanding financial inclusion through lower tariffs on micropayments and transactions.
It added that the revised framework would strengthen oversight and accountability, encourage the adoption of electronic payment channels, and accommodate new industry participants.
Business Post also reported that the regulator has raised ATM card fees by 50 per cent to N1,500 and scrapped the monthly maintenance charge.
By Aduragbemi Omiyale
The Central Bank of Nigeria (CBN) has proposed that financial institutions operating in the country should charge N150 for the e-dividend mandate processing fee from May 1, 2026.
This was contained in the latest Guide to Charges by Banks and Other Financial Institutions in Nigeria, signed by the Director of the Financial Policy and Regulation Department of the CBN, Ms Rita Sikе.
The move is to promote a safe and sound financial system in Nigeria, accelerate the adoption of innovative financial services, financial inclusion and micropayments/transactions.
The reviewed guide, according to the central bank, provides for an increased range of financial services, encourages development of innovative products, strengthens responsibility for oversight and accountability and promotes financial inclusion through lower tariffs for micropayments/transactions.
It also reviewed some charges for banking services to encourage increased adoption of electronic channels and accommodate new industry participants since the issuance of the 2020 guide.
“In view of the above, the draft guide is hereby exposed to members of the public for their comments/input on the proposed fees contained therein. Comments are to be sent to [email protected] on or before May 08, 2026,” a part of the note stated.
In the draft, the banking sector regulator is suggesting the payment of N1,500 for local debit card issuance and replacement by customers and a $10 annual fee for foreign currency-denominated debit/credit cards.
For on-site ATM transactions, a charge of N100 per N20,000 withdrawal was proposed and N100 plus a surcharge of not more than N500 per N20,000 withdrawal. It emphasised that the surcharge, which is an income of the ATM deployer/acquirer, shall be disclosed at the point of withdrawal to the consumer.
The bank also said that for electronic fund transfers below N5,000, no fee would be collected, but from N5,000 to N50,000, customers would part with N10, and for transfers above N50,000, the fee of N50 would be paid, while for microfinance banks, there would be the settlement bank’s charge plus 10 per cent of the charge.
The CBN noted that this guide applies to commercial banks, merchant banks, Payment Service Banks (PSBs), non-interest banks, microfinance banks, finance companies, Primary Mortgage Banks (PMBs), Development Finance Institutions (DFIs), credit guarantee companies, Mobile Money Operators (MMOs), and any other institution as may be designated by it.
In today’s rapidly evolving business environment, organisations face heightened competition, shifting workforce expectations, and increasing pressure to optimise productivity. Amid these dynamics, one truth has become increasingly clear: employees’ financial well-being is directly tied to organisational performance.
Employees who are financially secure demonstrate greater commitment, higher productivity, reduced absenteeism, and stronger alignment with company objectives. Conversely, financial stress has emerged as a leading contributor to disengagement, declining morale, and weakened performance across all levels of the workforce.
At Stanbic IBTC, we recognise this critical relationship between employee financial health and business outcomes. This insight led us to engineer Employee Value Banking (EVB)—a strategic, comprehensive, and future-proof solution designed to help organisations strengthen their workforce, elevate their value proposition, and drive long-term business sustainability.
EVB is a transformational partnership model aligning employee wellbeing with corporate productivity, risk reduction, and efficiency.
A Holistic, Employee-Centric Banking Architecture
EVB is built on the understanding that employees across varying grades and income brackets have unique financial realities. By offering a robust suite of banking, investment, insurance, and advisory services tailored to diverse needs, EVB empowers organisations to meaningfully enhance their workforce’s financial security and stability.
Key Components of the EVB Suite
- Digital Unsecured Personal Loans with Flexible Repayment
Employees gain access to seamless, digitally processed loans that allow them to meet immediate financial needs with ease.
Flexible repayment structures reduce financial strain while supporting responsible borrowing behaviour.
- Tailored Savings and Investment Solutions
Through structured savings plans, mutual funds, and diverse investment options, employees are empowered to build wealth over time.
This fosters discipline, long-term planning, and financial resilience.
- Pension and Asset Management Services
With Stanbic IBTC Pension Managers and Stanbic IBTC Asset Management, employees benefit from expert retirement guidance, wealth advisory, and long-term financial structuring—ensuring a secure and predictable future.
- Comprehensive Insurance Cover (Life, Health & Assets)
Employees and their families enjoy protection against major life risks, including health emergencies, life insurance, and property coverage.
This security enhances peace of mind and reduces workplace anxiety.
- Mortgage Support at a Competitive Single-Digit Rate of 9.75%
Homeownership remains a powerful symbol of stability and success.
Through EVB’s highly competitive mortgage solution, 774 families have successfully become homeowners from 2024 to date, demonstrating the program’s profound and measurable impact.
A Structured, Responsible, and Risk-Free Lending Model
One of the core strengths of EVB is its cadre-based lending framework, which aligns all loan offerings with employee grade levels, income bands, and organisational hierarchy. This ensures:
- Responsible and sustainable lending behaviours
- Protection against over-borrowing
- Stronger financial discipline
- Greater alignment with corporate HR structures
What distinctly sets EVB apart is its employer-focused risk mitigation. EVB’s structure ensures employers face no risk, making it uniquely designed for seamless adoption compared to standard banking programs.
All loans provided under the program are fully insured, meaning organisations carry:
- Zero liability
- Zero indemnity exposure
- Zero financial risk
This allows HR and management teams to expand their employee value proposition without adjusting internal financial structures or bearing additional costs.
Beyond Banking: Building a Financially Resilient Workforce
Financial empowerment is not achieved solely through products; it requires education, behavioural change, and consistent guidance.
Further differentiating EVB, Financial Fitness Workshops and complimentary Financial Health Checks are embedded as core components, giving employees ongoing support that competitors rarely offer.
These workshops cover:
- Personal budgeting and cash flow management
- Savings and investment strategies
- Smart debt management
- Retirement and pension planning
- Wealth creation principles
By equipping employees with financial knowledge, organisations reduce anxiety, enhance decision-making, and cultivate a more confident, resilient, and empowered workforce.
A Strategic Partnership That Delivers Sustained Organisational Value
EVB enables organisations to build a healthier, more motivated, and higher-performing workforce.
It is not a product—it is a strategic collaboration that enhances organisational culture, strengthens HR capability, and improves employer brand reputation.
Through EVB, organisations benefit from:
- Higher employee engagement
- Improved productivity and performance
- Reduced financial stress across all workforce levels
- Enhanced talent attraction and retention
- A stronger, richer reward and well-being structure
- A fully digital, modern, and efficient employee banking experience
EVB reflects Stanbic IBTC’s long-standing commitment to supporting organisations by empowering the individuals who drive their success.
Employee Value Banking (EVB) is a pivotal advancement in corporate banking. Where traditional bank–corporate relationships focused on organisational accounts and financial transactions, EVB introduces a holistic, human-centric model that puts employees’ well-being at the core of corporate financial services.
Through EVB, Stanbic IBTC has:
- Transitioned corporate banking from a transactional model to a value-driven partnership
- Expanded the definition of the corporate customer to include the entire workforce
- Integrated banking, pensions, investments, mortgages, insurance, and financial education into a unified ecosystem
- Elevated corporate banking into a strategic enabler of productivity, well-being, and business sustainability
- Positioned financial well-being as a competitive advantage for modern organisations
EVB has redefined the future of corporate banking, transforming it from a service function into a lever for organisational excellence, employee empowerment, and value creation.
Stanbic IBTC drives this change, enabling businesses to build secure, high-performing workforces.
-
Feature/OPED6 years agoDavos was Different this year
-
Travel/Tourism10 years ago
Lagos Seals Western Lodge Hotel In Ikorodu
-
Showbiz3 years agoEstranged Lover Releases Videos of Empress Njamah Bathing
-
Banking8 years agoSort Codes of GTBank Branches in Nigeria
-
Economy3 years agoSubsidy Removal: CNG at N130 Per Litre Cheaper Than Petrol—IPMAN
-
Banking3 years agoSort Codes of UBA Branches in Nigeria
-
Banking3 years agoFirst Bank Announces Planned Downtime
-
Sports3 years agoHighest Paid Nigerian Footballer – How Much Do Nigerian Footballers Earn