United Bank for Africa PLC has released its audited financial results for the year ended December 31, 2025, posting a sharp decline in profitability despite maintaining solid core earnings performance.
The bank reported a pre-tax profit of N423 billion, representing a 47 percent drop from the N804 billion recorded in 2024. Profit after tax also fell significantly to N404.7 billion, weighed down by elevated loan loss provisions and substantial fair value losses on derivatives.
Profit pressured by provisions and market losses
UBA’s bottom line was heavily impacted by an impairment charge of N331 billion, a 52.6 percent increase year-on-year, reflecting heightened credit risk across the banking sector. In addition, the bank recorded a net fair value loss on derivatives of about N278 billion, largely driven by foreign exchange volatility.
These factors dragged net interest income after impairment slightly lower to N1.289 trillion, even as underlying earnings remained resilient.
Core earnings remain above N1 trillion
Despite the decline in profit, the bank sustained strong income generation. Interest income rose by 9.5 percent to N2.649 trillion, supported mainly by earnings from investment securities, which contributed over half of total interest income.
Treasury bills generated more than N805 billion, while bonds contributed about N653 billion, highlighting UBA’s increased reliance on fixed-income instruments. Income from loans and advances stood at approximately N889 billion.
Net interest income grew modestly to N1.618 trillion, although rising funding costs saw interest expenses climb nearly 20 percent to N1.03 trillion.
Balance sheet expansion continues
UBA’s balance sheet remained robust, with total assets increasing by 9.4 percent to N33.17 trillion. Customer deposits rose by 11 percent to N23.95 trillion, accounting for more than 70 percent of the bank’s total funding base.
The bank also expanded its investment in securities to N14.43 trillion, significantly outpacing growth in loans and advances, which rose marginally by less than 1 percent to N7.02 trillion.
Shareholders’ funds increased by 24.4 percent to N4.25 trillion, with a capital adequacy ratio of 23.2 percent, reflecting a strong capital position.
Foreign operations provide growth buffer
UBA’s international business continued to deliver strong performance, with foreign operations contributing N312 billion in profit, up from N223 billion in the previous year.
West Africa operations recorded a 53 percent increase in profit, while East and Central Africa grew by 61 percent, underscoring the importance of the bank’s pan-African strategy.
Outlook and recovery efforts
The surge in loan loss provisions follows the expiration of regulatory forbearance measures introduced by the Central Bank of Nigeria, which had previously eased pressure on loan classifications.
UBA noted that many of the losses—particularly those linked to derivatives—are non-recurring and not expected to materially impact future earnings. The bank added that it has strengthened its recovery teams and is actively pursuing the resolution of affected loan facilities, with expected recoveries to support earnings from 2026 onward.
Dividend and market performance
In a move reflecting caution, the bank’s directors did not propose a final dividend for 2025, compared to N3.00 per share in 2024. Total dividend for the year stood at N0.25 per share, significantly lower than the N5.00 paid in the previous year.
On the equities market, UBA shares showed resilience, rising from N41.65 at the start of the year to N55 as of April 24, delivering a year-to-date return of over 32 percent, with additional gains recorded in recent weeks.
Overall, while profitability came under pressure, UBA’s 2025 performance highlights strong underlying earnings, balance sheet growth, and continued contributions from its international operations—factors expected to support a rebound in the coming financial year.