Two rating agencies, Global Credit Ratings and Data Pro Limited have affirmed the long term national scale rating of ‘BBB’ assigned to Unity Bank Plc, with the bank’s outlook considered as stable.

The rating is an indication that the bank has adequate protection factors and considered sufficient for prudent long term investment.

In addition, GCR rated Unity Bank A3, while DataPro rated the bank A2 for short term debts on the national scale.

According to DataPro, the bank shows fair balance sheet strength, operating performance and business profile.

“This institution, in our opinion, has an ability to meet its current obligations,” DataPro reported.

In its corporate credit rating report, Data Pro also said the bank’s strength lied in its good asset quality, geographical spread and robust and secured technological platform.

“The bank has also advanced its risk management practices evidenced by complete overhaul of its enterprise risk management policies, certification into the prestigious ISO27001:2005 and payments cards industry data security standards in order to ensure that customers’ information are always secured”.

The rating took into consideration all relevant factors to arrive at the assigned rating, and information used was based on industry and market intelligence including public perception.

According to the reports, the risk factors were assessed using the company’s capitalisation, earnings profile, liquidity, quality of assets and sustainability of subject’s current healthy profile in the medium to long term period.

The reports note the bank grew its shareholders’ funds from N43.8b in 2011 to N51b in 2012. Accumulated losses also declined from N18.9b in 2011 to N14.5b in 2012. The improved financials lead to an increase in the bank’s capital base by 17 per cent which is one of the highest percentage growths in the industry during the period.

Equity as a proportion of total assets also increased from 12 per cent in 2011 to 13 per cent in 2012 and regulatory capital adequacy ratio also improved from 12 per cent to 13 per cent within the same period. The minimum expected is 10 per cent.

The bank also overhauled the credit process through the development of an internal credit risk rating framework to assess the credit worthiness and likelihood of default of individual clients, the reports noted.

Source: Punch