"The negative outlook reflects Moody's view that UBP's solvency will weaken after the acquisition is completed, a result of a significant reduction in UBP's post-acquisition capital buffers amid heightened asset risks due to the ongoing pandemic," the ratings agency said. Further, Moody's also regards the bank's acquisition strategy as a supposed governance risk under its environmental, social, and governance framework, given the implications for the bank's capital, financial strategy and risk management. UnionBank's tangible common equity to adjusted risk-weighted assets ratio will decline to around 13% following the acquisition, from 15.3% as of the end of 2020. The bank's asset risk also remains elevated due to disruptions caused by the ongoing pandemic. UnionBank's gross non-performing loan ratio increased significantly to 4.9% as of the end of September 2021 from 3.3% as of the end of 2019, reported Moody's.