• Login
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
  • Home
  • News
    • General
    • Political
  • Economy
  • Business
    • Agribusiness
    • Aviation
    • Banking & Finance
    • Energy
    • Insurance
    • Manufacturing
    • Markets
    • Maritime
    • Real Estate
    • Tourism
    • Transport
  • Technology
    • Telecom
    • Cyber-security
    • Cryptocurrency
    • Tech-guide
    • Social Media
  • Features
    • Interviews
    • Opinions
  • Reports
    • Banking/Finance
    • Insurance
    • Budgets
    • GDP
    • Inflation
    • Central Bank
    • Sec/Gse
  • Lifestyle
    • Sports
    • Entertainment
    • Travel
    • Environment
    • Weather
  • NRTV
    • Audio
    • Video
No Result
View All Result
No Result
View All Result
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
No Result
View All Result
Home Business Banking & Finance

Fitch Ratings Affirms UBA Ghana’s Long-Term Issuer Default Rating at ‘B-‘ Amidst Economic Challenges

11 months ago
in Banking & Finance, Business, Economy, Features, highlights, Home, home-news, latest News
2 min read
0 0
0
84
VIEWS
Share on FacebookShare on TwitterShare on Linkedin

Fitch Ratings Affirms UBA Ghana’s Long-Term Issuer Default Rating at ‘B-‘ Amidst Economic Challenges

Fitch Ratings has affirmed United Bank for Africa (Ghana) Limited’s Long-Term Issuer Default Rating (IDR) at ‘B-‘ with a Stable Outlook and Viability Rating (VR) at ‘ccc’.

UBA Ghana’s Long-Term IDR is driven by potential support from its Nigeria-based parent, United Bank for Africa Plc (UBA; B-/Positive), as expressed by its Shareholder Support Rating (SSR) of ‘b-‘.

The Long-Term IDR is at the same level as Ghana’s Country Ceiling of ‘B-‘, which captures Fitch’s view of transfer and convertibility (T&C) risk.

“UBA Ghana’s VR of ‘ccc’ reflects our view that failure remains a real possibility due to high exposure to the Ghanaian sovereign (Restricted Default; RD) through securities. The bank incurred losses in the sovereign domestic debt exchange programme (DDEP) and some risks remain from the ongoing external debt restructuring and impending loan quality issues. Nevertheless, the losses are tolerable due to adequate capital buffers”, it said.

The VR is one notch below the implied VR of ‘ccc+’ due to the operating environment/sovereign rating constraint.

Fitch believes UBA has a high propensity to provide support, if required, despite the sovereign default, to preserve its Ghanaian operations due to the attractiveness and contribution of the Ghanaian market to its pan-African strategy, and the reputational implications of a subsidiary default. However, UBA Ghana’s ability to use support is conditioned by T&C risk. Fitch does not believe the authorities will impose controls that impede banks servicing their external debt.

RelatedPosts

Top 10 African Countries With the Weakest Currencies in July 2025

U.S. Demands $15,000 Deposit for Visa Applicants From Zambia and Malawi

BoG Governor Urges Banks to Rethink Business Models as Interest Rates Decline

Challenging Operating Environment

The report added that the DDEP imposed large losses on the banking sector, whose metrics continue to benefit from regulatory capital forbearance.

Macroeconomic conditions remain challenging due to high inflation (July 2024: 20.9%), interest rates, and cedi depreciation, which had driven the sector’s non-performing loans ratio to 24.1% in the first half of 2024.

Moderate Franchise

UBA Ghana represented just 2.9% of domestic banking sector assets at end-2023, but its franchise benefits from being a subsidiary of UBA.

High Sovereign Exposure

Fitch said sovereign exposure through fixed-income securities is high (end-2023: 271% of total equity). This includes new bonds (rated ‘CCC’) received in the DDEP and Treasury bills not subject to the restructuring. It also includes large holdings of recently restructured cocoa bills and Eurobonds, for which the restructuring is yet to conclude.

High Impaired Loans

UBA Ghana’s impaired loans were due to the challenging operating environment and a contracting loan book.

It however eased to 14.3% at end-June 2024 due to write-offs and recoveries. The importance of loan-quality risks for asset quality assessment is diminished by a small loan book, with broader asset quality more closely aligned with the sovereign’s creditworthiness.

Sovereign-Derived Income Reliant

Operating returns on risk-weighted assets averaged 5.0% between 2020 and 2023, despite the effects of the pandemic and sovereign default, primarily driven by high yields on government fixed-income securities.

Adequate Capital Buffers

Capital buffers as of June 30, 2024, were adequate to tolerate the restructuring of Eurobonds and higher problem loans.

Fitch estimates UBA Ghana would comply with capital requirements in the absence of regulatory forbearance and even if it used a higher discount rate to value new bonds received in the DDEP.

Tags: economic challengesFitch RatingsFitch Ratings Affirms UBA Ghana's Long-Term Issuer Default Rating at 'B-' Amidst Economic ChallengesLong-Term Issuer Default RatingUBA Ghana

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

I agree to the Terms & Conditions and Privacy Policy.

No Result
View All Result

Highlights

GSE-CI Climbs to 7,040.46 Points as Market Cap Rises by GHS294.3m Despite Trade Slowdown

EOCO Seizes Shatta Wale’s Lamborghini Linked to US Convicted Fraudster Nana Amuah

Former Black Stars Midfielder Agyemang Badu Calls for Increased Support for Women’s Football in Ghana

Black Stars Gear Up for Crucial World Cup Qualifiers Against Chad and Mali In September

CHAN 2024: Senegal Secure Narrow Win Over Nigeria, Congo Snatches Late Equalizer Against Sudan

Bright Simons Questions Policy Rationale Behind Communications Minister’s Demand for 30% DSTV Price Cut

Trending

Business

Top 10 African Countries With the Weakest Currencies in July 2025

August 6, 2025

Top 10 African Countries With the Weakest Currencies in July 2025 A weak currency can significantly deter...

U.S. Demands $15,000 Deposit for Visa Applicants From Zambia and Malawi

August 6, 2025
Governor of the Bank of Ghana (BoG), Dr Johnson Asiama,

BoG Governor Urges Banks to Rethink Business Models as Interest Rates Decline

August 6, 2025

GSE-CI Climbs to 7,040.46 Points as Market Cap Rises by GHS294.3m Despite Trade Slowdown

August 6, 2025

EOCO Seizes Shatta Wale’s Lamborghini Linked to US Convicted Fraudster Nana Amuah

August 6, 2025

Who we are?

NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World

NorvanReports is a unique data, business, and financial portal aimed at providing accurate, impartial reporting of business news on Ghana, Africa, and around the world from a truly independent reporting and analysis point of view.

© 2020 Norvanreports – credible news platform.
L: Hse #4 3rd Okle Link, Baatsonaa – Accra-Ghana T:+233-(0)26 451 1013 E: news@norvanreports.com info@norvanreports.com
All rights reserved we display professionalism at all stages of publications

No Result
View All Result
  • Home
  • Business
    • Agribusiness
    • Aviation
    • Energy
    • Insurance
    • Manufacturing
    • Real Estate
    • Maritime
    • Tourism
    • Transport
    • Banking & Finance
    • Trade
    • Markets
  • Economy
  • Reports
  • Technology
    • Cryptocurrency
    • Cyber-security
    • Social Media
    • Tech-guide
    • Telecom
  • Features
    • Interviews
    • Opinions
  • Lifestyle
    • Entertainment
    • Sports
    • Travel
    • Environment
    • Weather
  • NRTV
    • Audio
    • Video

Welcome Back!

Login to your account below

Forgotten Password?

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
NORVANREPORTS.COM | Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.