United Bank for Africa PLC

The stable outlook on our ratings on UBA reflects that on Nigeria (B-/Stable/B). If we were to take a negative rating action on Nigeria, we would take a similar negative action on the bank over the next 12 months. A rating action reflecting an improvement of Nigeria's sovereign creditworthiness would result in a similar positive action on the bank over the next 12 months, all else being equal. The group is headquartered in Nigeria but has operations in 19 other countries in Africa. The 'b' anchor is based on our Nigeria industry risk score of '9' (on a scale of 1-10, '1' denoting the lowest risk and '10' denoting the highest) and a blended economic risk score of '10'. The

...Strong earnings will continue to support regulatory capitalization in 2024. We expect United Bank for Africa's (UBA or the group) earnings to remain strong in 2024 with a return on equity (ROE) of 25%-30%. Earnings will be supported by rising interest rates and growth in fees and commissions. The group's regulatory capital adequacy ratio (CAR) remains the highest in the Nigerian banking sector at 28% as of June 30, 2024, well above the regulatory minimum of 15%. We expect the new paid-up capital requirements announced by the Central Bank of Nigeria in March 2024 will further bolster the bank's capital and loss-absorption capacity. UBA is planning to raise Nigerian naira (NGN) 400 billion by the end of 2025 through a combination of private placement and rights issuance to meet the new paid-up capital requirement of NGN500 billion for a bank with an international license....

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