UBA 2025 PAT declines by 49.7% to N373.65 billion

UBA’s FY2025 audited results released over the weekend reflect a significant moderation in earnings following the exceptionally strong prior year, as profit after tax declined by 49.7% y/y to N373.65bn, despite sustained growth in core banking income. Gross earnings remained robust, underpinned by an 11.8% y/y increase in interest income to N2.65trn, which drove a modest 5.7% expansion in net interest income to N1.62trn.

However, overall performance was materially impacted by a sharp contraction in trading income, down 177.3% y/y, alongside a surge in impairment charges (+29.9%y/y) and elevated operating expenses.
Non-interest income weakened considerably due to FX and trading-related losses, while cost pressures pushed the cost-to-income ratio up to 59.4% (vs. 49.5% in FY2024), reflecting inflationary pressures and higher operating intensity across the group’s pan-African footprint. Consequently, pre-tax profit declined by 47.3% y/y, with profitability metrics deteriorating significantly, as ROAE fell to 10.6% (from 28.1% in FY 2024) and ROAA to 1.3% (from 3.0% in FY 2024).

The Balance Sheet

On the balance sheet, total assets grew by 9.4% to N33.2trn, supported by a 4.1% increase in gross loans and a 9.4% rise in customer deposits, indicating continued franchise strength and funding resilience. Nonetheless, asset quality weakened, with the NPL ratio rising to 7.7% (from 5.6%), while the cost of risk increased to 4.4%. The bank also adopted a more conservative capital stance, reflected by its current dividend decision, signaling a strategic shift towards capital preservation and balance sheet stability. Based on this, there was no final dividend proposed by the Group, leaving its FY 2025 dividend payment at N0.25 (from N5.00 in FY 2024); this represents a dividend yield of 0.5% from Friday’s close price of N55.00, a significant drop from 12.0% in 2024.

In Q1 2026, unaudited results point to early signs of earnings stabilisation, although underlying pressures persist. Profit after tax declined by 24.8% y/y to N146.6bn, with pre-tax profit down 21.4% y/y to N160.7bn, as improvements in core income were offset by rising costs and elevated credit charges. Net interest income grew by 9.0% y/y to N383.7bn, supported by a 6.9% increase in interest income, while non-interest
income showed some resilience, with fees and commissions rising by 21.8% y/y. However, trading income declined by 4.9% y/y, and although other income increased significantly, it was insufficient to fully offset softer performances elsewhere.

Operating Expenses

Operating expenses rose sharply by 29.8% y/y, driven by higher personnel and administrative costs, resulting in a deterioration in cost efficiency, with cost-to-income increasing to 61.2%. In addition, loan impairment charges remained elevated, rising by 84.9% y/y, which continued to weigh on profitability.

Despite these pressures, the balance sheet remained broadly stable, with total assets marginally down by 0.1% year-to-date to N33.1trn, reflecting a more cautious growth stance. Gross loans increased modestly by 2.1%, while customer deposits grew by 0.8%, indicating steady but restrained intermediation. Profitability metrics showed some improvement relative to FY2025 exit levels, with ROAE at 13.7% and ROAA at
1.8%, suggesting a gradual recovery trajectory. Overall, while core earnings capacity remains intact, near-term performance will hinge on the bank’s ability to manage operating costs, stabilise asset quality, and sustain growth in core revenue lines. SOURCE. Coronation Asset Management