United Bank for Africa (UBA) has published its financial results for the first half of 2025, showing a pretax profit of N388.4 billion. The figure represents a marginal decline of 3.3 percent compared to N401.5 billion posted in the same period of 2024. Despite this slight drop, the bank delivered strong top line growth and declared an interim dividend of 25 kobo per share.
Interest Income Drives Growth
Interest income rose 32.9 percent to N1.3 trillion from N1 trillion in the first half of 2024. Treasury bills contributed the largest portion with N366.4 billion while term loans to corporates accounted for N319 billion. Bonds generated N279.2 billion, cash and bank balances yielded N113.2 billion, and loans and advances to banks brought in N105.6 billion. The sharp rise in interest income reflects the bank’s ability to benefit from the high interest rate environment.
Net interest income climbed to N773.03 billion compared to N674.62 billion a year earlier. This growth shows that UBA managed to keep interest income rising faster than the increase in costs.
Cost of Funds and Operating Expenses
Interest expenses surged to N560.6 billion from N328.9 billion in the prior year, representing a jump of nearly 70 percent. Rising deposit rates and more expensive borrowings placed significant pressure on margins.
Operating expenses also increased. Employee benefits rose 28.65 percent to N172.2 billion while other operating expenses stood at N312.9 billion. Cost pressures will continue to weigh on future performance if income does not rise at the same pace.
Non Interest Income Weakness
Net fees and commission income inched up slightly to N147 billion from N145 billion in 2024. However, UBA recorded a net trading and foreign exchange loss of about N10 billion compared with a gain of N98.1 billion last year. This swing underlines the volatility of non interest income streams.
Asset Growth and Balance Sheet Strength
UBA’s balance sheet continued to expand with total assets rising from N30.3 trillion to N33.2 trillion. Retained earnings grew 12.85 percent to N1.6 trillion, strengthening the bank’s equity position. Impairment charges on loans and advances fell significantly to N35.15 billion from N58.56 billion in the same period last year. This improvement suggests better asset quality management.
Profit After Tax and Dividend
Despite lower pretax profits, profit after tax increased to N335.53 billion from N316.36 billion in 2024. This was supported by a reduction in income tax expenses from N85.2 billion to N52.88 billion.
The directors have proposed an interim dividend of 25 kobo per share. While the payout ratio improved slightly to 7.83 percent from 7.3 percent, the per share amount is lower than the N2.00 paid in the same period of 2024. This change may reflect a larger share base or a more conservative approach to cash distribution.
Chartered Accountant’s View
UBA’s results demonstrate resilience in a challenging operating environment. The bank’s ability to grow interest income strongly is positive, but the steep rise in cost of funds is a red flag that must be closely monitored. The drop in loan impairment charges is encouraging, yet the volatility in trading and foreign exchange income shows the need for more stable non interest revenue streams.
For investors, the decline in dividend per share may be disappointing, but the strengthening of the balance sheet and steady profitability offer long term confidence. UBA’s performance in the second half of 2025 will depend on how effectively it manages rising costs, sustains asset quality, and balances dividend expectations with capital conservation.
