The United Bank for Africa (UBA) Plc, one of Africa’s leading financial institutions, has once again demonstrated resilience amid Nigeria’s challenging macroeconomic environment, recording a modest rise in profit after tax (PAT) despite widespread earnings declines across the banking sector.
UBA’s unaudited results for the first nine months of 2025, filed with the Nigerian Exchange (NGX), revealed a 2.3% year-on-year growth in net income to ₦537.53 billion, up from ₦525.31 billion in the same period of 2024. This performance stands in sharp contrast to the downward profit trend reported by other Tier-1 banks grappling with elevated funding costs, volatile foreign exchange markets, and regulatory tightening by the Central Bank of Nigeria (CBN).
Core Banking Strength Drives Topline Growth
Gross earnings rose by 3% year-on-year to ₦2.47 trillion, buoyed largely by UBA’s core banking activities. The group’s interest income jumped 10.1% to ₦1.98 trillion, supported by higher yields on investment securities and loans to banks. These gains more than compensated for softer income from customer loans and cash balances.
However, the bank also felt the sting of rising interest expenses, which surged 16.3% year-on-year to ₦808.72 billion due to increased deposit costs and institutional borrowings — a trend consistent with the CBN’s tight monetary stance and elevated benchmark rates.
Despite these pressures, UBA maintained healthy asset quality, evidenced by a 44% decline in impairment charges on expected credit losses to ₦56.89 billion, from ₦123.48 billion in the same period last year. The reduction reflects the bank’s conservative credit risk management across its multi-jurisdictional operations spanning 20 African countries, as well as London, Paris, New York, and Dubai.
Non-Interest Income Normalizes After FX Windfall
While interest-based revenues strengthened, non-interest income dropped 28.9% year-on-year to ₦310.08 billion, largely due to the normalization of foreign exchange-related gains. The report showed that FX revaluation income plummeted 83.3%, while trading income fell 37.6%, following the CBN’s ongoing exchange rate unification drive which significantly reduced revaluation gains that had boosted banks’ profits in 2024.
Still, UBA’s investment securities gains surged 230.6% to ₦106.45 billion, providing a partial buffer. Fee and commission income remained stable, underscoring steady transaction volumes across its digital and retail platforms, which serve over 45 million customers.
Cost Management and Lower Taxes Support Profitability
Operating income edged up slightly by 0.6% to ₦1.42 trillion, while operating expenses rose 4.2% year-on-year to ₦846.15 billion, driven by higher personnel costs, AMCON levy, and asset depreciation linked to network expansion and technology upgrades.
Profit before tax (PBT) slipped 4.1% to ₦578.60 billion, but a substantially lower tax charge helped lift bottom-line performance. The group’s income tax expense fell sharply by 47.5% to ₦41.07 billion, down from ₦78.17 billion a year earlier, contributing to the overall 2.3% increase in net profit.
According to a review note from Cordros Securities Limited, “UBA’s earnings momentum remains anchored on robust interest income, moderated credit charges, and continued deposit growth, even as non-funded income normalises further.”
Sector Context: Divergent Fortunes Amid Tight Policy
UBA’s stable performance contrasts with reports from several Tier-1 peers who posted lower profits in the same period due to significant FX revaluation losses and rising operating expenses. Analysts say UBA’s broad Pan-African footprint provided a natural hedge against Nigeria’s volatile monetary environment, enabling it to balance earnings from diverse currency zones.
Market watchers also point to the CBN’s recent Open Market Operations (OMO) auctions, in which ₦2.1 trillion worth of bills were allotted to investors at competitive rates, as a signal of sustained liquidity tightening — a policy stance likely to keep banks’ funding costs elevated into Q4 2025.
Outlook: Sustained Strength, Strategic Caution
Looking ahead, analysts expect UBA to sustain earnings growth through strategic asset repricing, increased digital penetration, and enhanced capital efficiency. However, persistent regulatory costs, high inflation, and subdued FX trading income could limit upside potential.
UBA’s management has consistently emphasized its focus on risk-adjusted returns and balance sheet optimization, aligning with its strategic ambition to consolidate leadership in African financial services.
As the 2025 financial year draws to a close, the Pan-African lender appears well-positioned to weather short-term headwinds while maintaining profitability across diverse markets — reaffirming its reputation as one of Africa’s most resilient banking groups.
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Reporting by Godwin Okafor, The Naija247news in Lagos, Nigeria.
