UBA records N404 billion profit after-tax

By Philippine Duru

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United Bank for Africa (UBA) Plc says it is stepping up efforts to recover bad loans and plans to resume dividend payments to shareholders in 2026, despite recording a sharp drop in profit for the 2025 financial year.

The bank reported an after-tax profit of N404 billion for the year ended December 31, 2025, representing a 47 percent decline from N766 billion posted in 2024. The drop was largely driven by a one-off provision of N331 billion for non-performing loans.

Speaking in an interview, UBA’s Group Managing Director/CEO, Oliver Alawuba, said the impairment charge was due to regulatory compliance and does not reflect any weakness in the bank’s core operations.

“We’re going after these defaulting customers, and there are signs that they are paying back. Once they do, we’ll be in a position to pay dividends for this year,” he said.

Alawuba explained that the bank suspended its final dividend payment last year following a directive from the Central Bank of Nigeria requiring lenders to exit the forbearance loan window. This development pushed UBA’s non-performing loan (NPL) ratio above the regulatory threshold needed to declare dividends.

“That dividend didn’t come because the NPL ratio was a bit higher than expected for a dividend payment. However, the good news is that this is a one-off thing,” he added.

Despite the profit decline, UBA recorded strong growth in gross earnings, which rose to N3.09 trillion. The performance was driven by increases in both interest and non-interest income streams.

Interest income grew by 9.84 percent to N2.649 trillion, with investment securities contributing N1.47 trillion—about 56 percent of total interest income. Treasury bills generated over N805 billion, up 18 percent, while bond income surged by 45 percent to N653 billion. Loans and advances accounted for N889 billion, representing roughly 33 percent of interest income.

The bank’s deposit base also expanded by 11 percent to N23.949 trillion, making up more than 71 percent of its balance sheet. Cash and bank balances rose to N185 billion from N146 billion recorded in 2024.

Alawuba noted that UBA’s capital adequacy ratio remained strong at 23.2 percent, with shareholders’ funds standing at N4.3 trillion and total deposits reaching N27.2 trillion.

With a loan portfolio of about N7 trillion, he said the bank is well-positioned to increase lending as economic conditions improve.

“As the economy in Nigeria recovers, interest rates will come down, giving us the impetus for loan growth that will further boost profit. The business is strong,” he said.