October 31, 2025/Cordros Report

United Bank for Africa (UBA) released its unaudited 9M-25 financials, reporting a 10.5% y/y decline in earnings per share (EPS) to NGN13.56 (9M-24: NGN15.15). This decline partly stemmed from the issuance of additional outstanding shares by the bank. Nonetheless, profit after tax increased modestly by 2.3% y/y to NGN537.53 billion, driven by a lower effective tax charge.

Interest income grew 10.1% by y/y to NGN1.98 trillion, underpinned by higher earnings from investment securities (+30.4% y/y) and loans to banks (+10.2% y/y), which outweighed declines in cash balances (-24.0% y/y) and customer loans (-2.8% y/y).

Interest expense, however, rose by 16.3% y/y to NGN808.72 billion, primarily due to higher costs on customer deposits (+13.4%) and institutional funding (+29.4%). Despite funding cost pressures, net interest income ex-LLE grew by 13.8% y/y to NGN1.11 trillion, supported by a significant 53.9% decline in credit impairment charges to NGN56.89 billion.

Non-interest income declined 28.9% by y/y to NGN310.08 billion, weighed by the sharp normalisation of FX-related gains as FX revaluation and trading income fell by 83.3% and 37.6% y/y, respectively. Nonetheless, investment securities gains surged by 230.6% y/y to NGN106.45 billion, providing some offset, while fee and commission income remained stable (+0.4% y/y).

Operating expenses rose by 4.2% y/y to NGN846.15 billion, driven by higher personnel costs (+20.1% y/y), AMCON levy (+32.1%), and depreciation (+34.5%), though we saw moderation in occupancy (-32.1% y/y), contract (-20.3% y/y) and communication (-45.5% y/y) costs. That said, the cost-to-income ratio (ex-LLE) weakened to 57.1% (9M-24: 52.8%).

Profit before tax (PBT) dipped by 4.1% y/y to NGN578.60 billion, but a substantially lower tax charge (-47.5% y/y) lifted PAT to NGN537.53 billion, up 2.3% y/y.

Comment: UBA’s 9M-25 results reaffirm its resilient core banking performance amid a high-yield environment. The sharp drop in impairment charges and sustained investment income offset pressures from elevated funding costs and weaker FX income. Looking ahead, we expect UBA’s earnings momentum to remain anchored on robust interest income, moderated credit charges, and continued deposit growth, even as non-funded income normalises further. Our estimates are under review.