Mixed reactions over UBA’s 2025 N407.7bn profit decline, dividend skip

The United Bank for Africa Plc, one of Nigeria’s Tier 1 banks, on Friday last week released its 2025 full-year audited and Q1 2026 unaudited results showing that profit declined both in the full year 2025 and Q1 2026. The development has sparked concerns among shareholders and customers of the bank following the decision not […]

The United Bank for Africa Plc, one of Nigeria’s Tier 1 banks, on Friday last week released its 2025 full-year audited and Q1 2026 unaudited results showing that profit declined both in the full year 2025 and Q1 2026.
The development has sparked concerns among shareholders and customers of the bank following the decision not to pay dividends as anticipated for the 2025 financial year.
However, despite the huge decline in profit before tax and profit after tax at N423.4 billion (-47.3% YoY) and N407.7 billion (-47.2% YoY), respectively, the bank still recorded strong growth in its earnings.
The performance stemmed from the 56.8% YoY decline in NIR, on the back of a N181.9 billion net trading and foreign exchange loss booked in Q4’25.
Q4’25 was also pressured by a 3.5x quarter on quarter jump in impairment for credit losses to N296.2 billion, bringing FY’25 cumulative impairment charges on financial assets to N329.3 billion (+29.9% YoY).
Accordingly, the cost of risk jumped to 5.0% (vs 3.4% in FY’24). Also, NPL and NPL ratio increased materially to N615.4 billion (+40.6% YoY) and 8.1% (+2.1ppts YoY), respectively.
For the Q1 2026 result, the bank reported a 22.8% Year on Year decline in Profit After Tax (PAT) to N146.6 billion, dragged by pressures from operating expenses (OPEX) and loan impairments.
Also, Earnings Per Share (EPS) fell sharply by 41.9% YoY to N3.11 (vs N5.35 in Q1’25), reflecting the additional 3.16 billion ordinary shares from its 2025 rights issue program.
Gross earnings grew modestly by 4.9% YoY to N801.5 billion, largely reflecting a similarly modest increase in interest income to N641.1 billion (+6.9% YoY). The growth in interest income primarily emanated from government securities, which cushioned the impact of the 20.2% decline in interest income from loans to customers.
The forbearance factor
The 2025 result and the decision not to pay dividend was largely due to the decision of the bank to exit the forbearance regime in line with the directive of the Central Bank of Nigeria (CBN).
The CBN had in a June 13 2025 circular frozen dividends and other capital outflows for banks still operating under regulatory leniency frameworks introduced in the aftermath of COVID-19 and the attendant economic downturn.
Regulatory forbearance is a policy tool used by central banks that permit banks and financial institutions to maintain operations despite falling below required capital thresholds. It is a provisional measure that allows the restructuring of assets such as non-performing loans.
Following the decision to exit the regulatory forbearance, UBA made a provision of a whooping N331bn to finally exit the forbearance loan regime.

 

This explains why the bank skipped dividend payment for the year with the Group Managing Director, Oliver Alawuba pleading for the understanding of the shareholders and assuring that dividend would be paid this year.

 

In a television interview, Alawuba also disclosed that the bank would aggressively pursue loan defaulters in 2026 in order to reduce the NPLs.

 

He said, “UBA has a long history of dividend payments, with yields sometimes reaching double digits. We paid dividends consecutively from 2023 through the first half of 2025. However, the Central Bank of Nigeria gave banks a window to exit the forbearance regime, and UBA was one of the banks that did so. That required us to reclassify certain accounts in line with prudential guidelines. We made provisions of about N331 billion, which pushed our non-performing loan ratio above the threshold required for dividend payment.

 

“But the good news is that we have taken that end because that is a reset and that is actually a one-off incident and it’s non-recurring. So in this year, to pursue those recoveries and get those loans come back, it will moderate the NPR. And we’re also going to get a write-back in 2026 and going forward in 2027. That write-back will also be an impact, a positive impact on our income and profit for 2026. So we expect to pay dividend in 2026.”

 

A shareholders’ leader, Pastor Olagoke Samson said while UBA has been performing well in recent years, the decision not to pay dividend in 2025 is taken with mixed feelings.

 

“UBA has been doing well before including their subsidiaries. They have always paid dividends and we have to be patient with them,” he said.

 

Also speaking, Pastor Boniface Okezie in a chat with our correspondent tasked the bank to aggressively pursue loan defaulters, saying the people are not ghosts.

 

“It is certain they are not going to pay a dividend but that does not mean that the bank is down,” he said, urging the bank not to relent in pursuing loan defaulters.

 

In his intervention, a financial analyst, Omiete Inko-Tariah however said there was no need to panic over the development, saying with the rise in its core banking like the growth in assets, shareholders’ fund, among other metrics, the bank is now financially “stronger than before.”

 

He stated that the decision to clean up its books with the N331bn loan and the loss of N278bn due to exchange rate volatility made it difficult to pay dividend in 2025, leaving shareholders with only 25 kobo interim dividends.

 

According to him, this was the same decision taken by First Bank recently by writing off N748bn non-performing loans.

 

“A further look at the earnings’ report showed that UBA’s core businesses still remain strong. Income interest rose to N2.65 trillion, up 9.8 per cent and operating profit still crossed N9 trillion which means the business itself is still generating serious money, even more interesting UBA’s African subsidiaries outside Nigeria now contribute over 50 per cent of assets, revenue and profit,” he added.

 

Inko-Tariah however added that the increase in bad loans from 5.58% to 7.67% while cost-to-income rose from 49.5% to 59.4% which means operating expenses are getting higher.