UNITED BANK FOR AFRICA PLC Q3 Result – Stable Earnings Performance Amid Higher Net Interest Income and Strong Balance Sheet Expansion

Executive Summary

United Bank for Africa Plc delivered a resilient performance for the nine months ended September 30, 2025, despite global macro headwinds, FX market volatility, and inflationary pressures across its operating jurisdictions. The Group sustained its earnings momentum on the back of robust interest income growth, improved asset yields, and disciplined risk management. Profit Before Tax stood at ₦578.6 billion vs ₦603.5 billion in 9M 2024, reflecting a modest decline of 4% YoY, arising largely from lower trading and FX income due to moderated FX market volatility. Profit After Tax grew 2% YoY to ₦537.5 billion, supported by lower tax expense and stronger balance sheet earnings capacity. Gross earnings increased 3% YoY to ₦2.47 trillion, driven by a 10% YoY increase in interest income to ₦1.98 trillion, as the Bank benefitted from higher yields on investment securities and customer loans. Net interest income expanded 6% YoY to ₦1.17 trillion, reinforcing the strength of UBA’s core banking franchise. The Bank recorded strong balance sheet growth, with total assets rising 7% YTD to ₦32.49 trillion, supported by growth in customer deposits, loans, and investment securities.

Financial Highlights – Statement of Profit or Loss

₦’ million 9M 2025 9M 2024

Gross Earnings 2,468,905 2,398,002

Interest Income 1,980,277 1,798,894

Interest Expense (808,716) (695,571)

Net Interest Income 1,171,561 1,103,323

Net Fees & Commission Income 234,842 233,853

Trading & FX Income 41,357 182,484

Other Operating Income 39,316 23,785

Net Monetary Loss (5,440) (4,282)

Total Non-Interest Income 310,075 435,840

Operating Income 1,481,636 1,539,163

Net Impairment Charge (56,890) (123,478)

Operating Expenses (846,149) (812,202)

Profit Before Tax 578,597 603,483

Income Tax Expense (41,070) (78,170)

Profit After Tax 537,527 525,313

EPS (Naira) ₦13.56 ₦15.15

Revenue Performance

• Gross earnings +3% YoY driven by higher interest-earning assets.
• Interest income +10% YoY, benefitting from higher market interest rates and loan book growth.
• Net fees and commissions stable, supported by payments, remittances, and digital banking volumes.
• Trading & FX income declined sharply due to reduced FX revaluation gains vs prior year’s exceptional performance.

UBA’s diversified African footprint and digital payments infrastructure continued to underpin fee-based income resilience.

Profitability and Margins

• Net interest margin expansion supported earnings stability.
• Cost-to-income ratio increased modestly due to inflationary and regulatory-driven operating costs.
• Impairments fell 54% YoY, reflecting improved credit quality and recoveries.
• Tax expense declined significantly, aiding bottom-line growth.

While non-interest revenue normalized due to lower FX revaluation gains, core banking income remained solid.

Balance Sheet Overview

₦’ million Sep 2025 Dec 2024 % Δ

Cash and Bank Balances 9,114,658 8,163,668 +12%

Loans to Customers 7,198,996 6,954,545 +4%

Investment Securities 13,591,084 12,534,505 +8%

Total Assets 32,491,560 30,323,355 +7%

Deposits from Customers 23,799,278 21,894,689 +9%

Borrowings 695,366 1,394,796 -50%

Total Equity 4,301,137 3,418,639 +26%

Interpretation

• Strong balance sheet expansion driven by deposit mobilization and investment securities.
• Customer deposits grew 9% YTD, confirming franchise strength.
• Sharp reduction in borrowings improves leverage and funding cost efficiency.
• Equity grew 26% YTD, reflecting profit accretion and capital augmentation (share capital & premium increase).

Key Ratios & Indicators

Metric 9M 2025

Gross Earnings Growth +3%

Net Interest Income Growth +6%

Cost-to-Income Ratio Higher YoY

PBT Growth -4%

PAT Growth +2%

Asset Growth +7%

Customer Deposit Growth +9%

Borrowings -50%

Strategic Insights

• Continued focus on Pan-African network and cross-border banking flows
• Digital and payments ecosystem supporting fee income stability
• Strengthened capital position allows strategic expansion and risk absorption
• Lower impairments underscore effective credit risk management

Strengths

• Strong funding base and leading African footprint
• Solid earnings quality driven by core banking income
• Significant equity strength and capital buffer
• Reduced leverage enhances balance sheet resilience

Weaknesses

• Lower FX revaluation income vs exceptional prior year
• Persistent inflationary cost pressures across markets
• FX and sovereign risks in high-inflation African economies

Outlook

UBA is well-positioned to sustain earnings momentum driven by strong balance sheet liquidity, expanding retail and digital penetration, and improved NIMs. While FX market normalization moderates non-interest revenue, core interest earnings and loan book growth should support full-year performance. Focus remains on funding efficiency, asset quality, and capital optimization.

Analyst View

“UBA delivered a steady performance despite normalization in FX gains. Strong core banking earnings, healthy asset growth, and capital reinforcement highlight its resilient franchise and strategic positioning across Africa. Continued digital scaling and balance sheet efficiency will support future profitability.”

Conclusion

UBA sustained financial stability in 9M 2025, balancing macroeconomic volatility with disciplined balance sheet management and core earnings strength. With a rapidly growing deposit base, strengthened capital structure, and robust digital infrastructure, the Group remains positioned for continued growth and enhanced shareholder value creation.