UBA’s Pre-Tax Profit Soars 30.65% to N204.27 Billion in Q1 2025, Bolstered by Interest Income Surge
Lagos, Nigeria – April 23, 2025
United Bank for Africa (UBA) Plc, one of Nigeria’s leading Tier-1 banks, announced a robust 30.65% year-on-year increase in pre-tax profit, reaching N204.27 billion for the first quarter of 2025, up from N156.34 billion in Q1 2024. The unaudited financial results, released on April 22, 2025, and reported by Nairametrics, highlight UBA’s resilience in a high-interest-rate environment, driven by a 76.4% surge in interest income to N777.11 billion from N440.76 billion. The bank’s performance underscores its strategic focus on lending, securities investments, and digital banking, though rising costs and regulatory pressures pose challenges.
Financial Highlights: A Surge in Earnings
UBA’s Q1 2025 results showcase strong growth across key metrics:
- Interest Income: Soared 76.4% to N777.11 billion, with loans and advances contributing N407.36 billion (up 83.8%) and investment securities adding N338.46 billion (up 68.3%). Income from placements with other banks jumped 17.4% to N229.35 billion, and loans to other banks skyrocketed 771% to N31.20 billion.
- Net Interest Income: Rose 77.6% to N529.15 billion from N297.97 billion, despite a 77% increase in interest expenses to N247.96 billion, reflecting higher funding costs in Nigeria’s tight monetary climate.
- Non-Interest Income: Grew 44.2% to N112.36 billion, driven by a 15.7% rise in net fees and commission income to N71.96 billion, though foreign exchange (FX) trading and revaluation gains dropped 21%.
- Operating Income: Increased 19.9% to N450.06 billion, supported by diversified revenue streams.
- Profit After Tax: Expanded 33.1% to N189.84 billion, with income tax expenses up 4.8% to N14.43 billion.
- Total Assets: Climbed 15.2% from N30.4 trillion in December 2024 to N35.02 trillion, fueled by a 17.2% rise in loans and advances to N10.62 trillion.
- Customer Deposits: Grew 14.8% to N24.81 trillion, reinforcing UBA’s deposit mobilization strength.
The bank’s cost-to-income ratio improved to 54.6% from 58.3% in Q1 2024, reflecting operational efficiency despite a 12.3% rise in operating expenses to N245.79 billion, driven by regulatory costs and inflation. Personnel expenses surged 27.2% to N84.32 billion, AMCON levies rose 28.4% to N22.94 billion, and NDIC premiums increased 19.2% to N12.83 billion.
Strategic Drivers and Market Context
UBA’s performance was propelled by Nigeria’s high interest rate environment, with the Central Bank of Nigeria’s benchmark rate at 24.75% in Q1 2025, up 600 basis points from Q4 2023. The bank capitalized on this through strong earnings from loans, treasury bills, and bonds, with investment securities alone yielding N338.46 billion. Its loan portfolio grew 17.2% to N10.62 trillion, and a 28.19% reduction in allowance for credit losses to N7.14 billion signals improved asset quality, per Nairametrics.
Digital banking also shone, with UBA generating N284.7 billion from e-business transactions in 2024, a trend likely continuing into 2025. The bank’s ongoing equity capital raise, targeting up to N400 billion, as noted by @thecondia on X, aims to bolster its financial stability and support expansion across its 20 African markets and global hubs in London, Paris, and New York.
However, challenges loom. A 21% drop in FX trading and revaluation gains reflects Nigeria’s volatile forex market, and rising regulatory costs strain margins. Clara Voss, the fictional wealth manager from prior stories, sees parallels to her warnings about unpriced risks. Her clients, invested in Nigerian banks, view UBA’s growth as a hedge against global volatility—like gold’s $2,800-an-ounce rally—but Clara flags the threat of digital currencies and Nigeria’s economic headwinds, akin to the FDA’s milk testing halt or the Pahalgam attack’s economic fallout. For Clara, UBA’s surge, like Tesla’s Q1 peak, is a high note in a fragile symphony.
Public and Market Sentiment
The results sparked optimism on X. @Nairametrics announced, “UBA’s pre-tax profit surges by 30.65% to N204.27 billion in Q1 2025,” while @thecondia highlighted the bank’s capital raise and 33% profit growth. Investors on Nairametrics’ forums praised UBA’s lead among FUGAZ banks (FirstBank, UBA, GTBank, Access, Zenith), with its N803.7 billion pre-tax profit for 2024 setting a high bar. However, some, like @abuelaofanarchy in related contexts, warned of systemic risks in Nigeria’s banking sector amid global economic shifts.
Looking Ahead
UBA’s Q1 2025 performance reinforces its position as Nigeria’s most profitable bank, building on its 2024 full-year pre-tax profit of N803.7 billion and post-tax profit of N766.5 billion. Group Managing Director Oliver Alawuba, speaking on the 2024 results, emphasized UBA’s focus on earnings growth and asset quality, a strategy evident in Q1 2025. The bank’s capital raise and investments in digital platforms position it for further growth, but Nigeria’s 32.7% inflation rate and potential rate hikes could pressure margins.
As UBA navigates these dynamics, its Q1 surge is a testament to resilience, but like India’s response to the Pahalgam attack or the student loan collection chaos, it faces a world of unpriced risks. For now, investors and analysts, buoyed by a 10% stock price jump post-2024 dividends, see UBA as a beacon in African banking, with its next quarterly results eagerly awaited.
Sources: Nairametrics, Daily Trust, Leadership NG, X posts from @Nairametrics, @thecondia
