• 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

Summary of Events Following Confirmation of Deaths of Defence and Environment Ministers, Six Others in Military Helicopter Crash

FDI Rises to 3-Year High as Reforms Boost Investor Confidence

Togo is Flexing its Unrivaled Maritime Power

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

Parliament Expresses Grief Over Death of Ministers, MP and 6 Others in Military Helicopter Crash

GSE Composite Index Up 46.51% YTD as Market Capitalization Hits GHS 147.91 Billion

Global Financial Bias Costs Africa $75 Billion Annually

GFA President.Set to Visit Gold Stars, Asante Kotoko, and Police Ladies to Strengthen CAF Campaigns

CHAN 2024: Tanzania and Burkina Faso Secure Important Wins

US Open Announce Record $90 Million Prize Money for 2025 Tournament

Trending

Features

Summary of Events Following Confirmation of Deaths of Defence and Environment Ministers, Six Others in Military Helicopter Crash

August 7, 2025

Summary of Events Following Confirmation of Deaths of Defence and Environment Ministers, Six Others in Military Helicopter...

FDI Rises to 3-Year High as Reforms Boost Investor Confidence

August 7, 2025

Togo is Flexing its Unrivaled Maritime Power

August 7, 2025

Parliament Expresses Grief Over Death of Ministers, MP and 6 Others in Military Helicopter Crash

August 7, 2025

GSE Composite Index Up 46.51% YTD as Market Capitalization Hits GHS 147.91 Billion

August 7, 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.