UBA’s profit drops 47% to ₦423bn on rising loan losses

United Bank for Africa (UBA) saw its profit decline sharply in 2025 despite strong revenue growth, as rising loan loss provisions and derivative losses weighed heavily on its bottom line.

The bank, in its audited full-year results, reported a 47% drop in pre-tax profit to ₦423 billion, down from ₦804 billion in 2024. Profit after tax also fell to ₦404.7 billion, reflecting the same pressure across its earnings.

The major hit came from impairment charges and market-related losses. UBA recorded ₦331 billion in loan loss provisions, up more than 50% year-on-year, largely linked to risk exposure following the expiration of regulatory forbearance measures by the Central Bank of Nigeria.

In addition, the bank booked significant fair value losses on derivatives, driven by exchange rate volatility, further dragging down profitability.

These costs overshadowed what was otherwise a strong operating performance.

Core business still strong

Underneath the headline drop, UBA’s core earnings remained resilient. Gross earnings rose to ₦3.09 trillion, supported by interest income of ₦2.65 trillion, up nearly 10%.

However, rising funding costs also became evident. Interest expenses climbed almost 20% to ₦1.03 trillion, tightening margins.

Net interest income still crossed the ₦1 trillion mark, though it dipped slightly after accounting for impairments.

The bank’s income mix also shows a clear shift toward investment securities. Holdings in treasury bills and bonds generated over ₦1.4 trillion, more than half of total interest income, while loans contributed about one-third.

Balance sheet expansion continues

UBA’s balance sheet remained solid, with total assets growing 9.4% to ₦33.17 trillion. Customer deposits rose 11% to ₦23.95 trillion, reinforcing liquidity.

However, lending growth was relatively muted. Loans and advances increased by less than 1% to ₦7.02 trillion, suggesting a cautious credit stance amid rising risks.

Meanwhile, shareholders’ funds climbed 24% to ₦4.25 trillion, with a capital adequacy ratio of 23.2%, indicating a strong buffer.

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Foreign operations cushion performance

The bank’s international business provided some relief. Foreign operations delivered ₦312 billion in profit, up significantly from ₦223 billion in 2024.

Growth was particularly strong in West Africa, as well as East and Central Africa, highlighting UBA’s pan-African diversification strategy.

In a move that reflects its conservative outlook, the bank did not declare a final dividend for 2025. Total dividend for the year stood at just ₦0.25 per share, a steep drop from ₦5.00 per share in 2024.

UBA expects some of the pressures, particularly loan losses, to ease, noting that many of the charges are non-recurring. The bank also says recovery efforts are underway, with potential upside to future earnings.

Still, the results underline a key reality for Nigeria’s banking sector: strong revenue growth no longer guarantees profit, especially in a high-risk, volatile economic environment.