United Bank for Africa (UBA) has reported a pre-tax profit of N388.4 billion for the first half of 2025, down 3.28% from N401.5 billion in the same period last year.
Gatekeepers News reports that the decline came despite strong top-line growth, as rising interest expenses and operating costs weighed on profitability.
Strong income growth
UBA’s interest income jumped 32.89% year-on-year to N1.3 trillion from N1 trillion in H1 2024. Treasury bills contributed the largest share at N366.4 billion, followed by corporate term loans (N319 billion) and bonds under investment securities (N279.2 billion). Cash and bank balances generated N113.2 billion, while interest on loans and advances to banks added N105.6 billion.
Interest expenses, however, rose sharply to N560.6 billion from N328.9 billion a year earlier. This left net interest income at N773 billion (up 14.59%), which after an impairment charge of N35.1 billion, settled at N741 billion (up 20.61%).
The bank also earned N147 billion from net fees and commission income, a modest 1.34% rise from N145 billion in H1 2024.
Cost pressures
Profitability was dragged by higher expenses:
• Net trading and FX activities recorded a loss of N10 billion, compared with a N98.1 billion gain in 2024.
• Employee benefit expenses surged 28.65% to N172.2 billion.
• Other operating expenses rose slightly to N312.9 billion.
Bottom line and balance sheet
Despite the cost pressures, post-tax profit increased 6.06% to N335.5 billion, helped by a drop in income taxes to N52.8 billion from N85.2 billion.
Total assets rose 9.57% to N33.2 trillion from N30.3 trillion, while retained earnings climbed 12.85% to N1.6 trillion.
Dividend proposal
UBA’s board is proposing an interim dividend of 25 kobo per share, compared with N2.00 in H1 2024. This represents a payout ratio of 7.83% (7.3% in 2024) and a dividend yield of 1.4% (down from 8.9%).
As of September 18, UBA shares were trading at N47.00, up 38.33% year-to-date on the Nigerian Stock Exchange.
