Despite touting “solid performance,” United Bank for Africa (UBA) Plc has reported worrying signs of profit slowdown and weakening growth momentum in its latest audited results for the third quarter ended September 30, 2025.
While the bank managed modest gains in some areas, key financial indicators reveal a decline in profitability and sluggish performance that suggest rising pressure on Africa’s self-styled “Global Bank.”
Profit before tax drops as growth falters
UBA’s financial report filed with the Nigerian Exchange Limited (NGX) shows a 4.1% decline in Profit Before Tax (PBT) to ₦578.59 billion, down from ₦603.48 billion recorded in the same period of 2024 — a clear indication that earnings efficiency is deteriorating despite marginal income gains.
Even though Profit After Tax (PAT) edged up by just 2.3% to ₦537.53 billion (from ₦525.31 billion in 2024), analysts say this minimal growth reflects stagnation rather than strength, especially when compared to the double-digit gains posted by peer banks in the same period.
Gross earnings grew only 3% year-on-year, from ₦2.398 trillion to ₦2.469 trillion — an underwhelming result given inflationary pressures and Nigeria’s fast-rising interest rate environment, which has generally boosted banks’ income across the sector.
Falling Profitability Despite Asset Expansion
While total assets climbed 7.2% to ₦32.49 trillion, and deposits rose 7.7% to ₦26.54 trillion, these gains appear largely cosmetic. The asset growth did not translate to proportionate profitability, raising concerns that the bank may be over-leveraged or struggling to convert assets into real earnings.
Similarly, the group’s shareholders’ funds rose 25.8% to ₦4.3 trillion, but much of this was due to its forced recapitalisation drive, not organic profitability.
UBA’s return on equity (ROE), though not disclosed in the report, is expected to fall short of prior-year levels given the slow profit growth relative to asset and capital expansion — an outcome investors often interpret as diluted efficiency.
Management’s optimism contradicts market reality
UBA’s Group Managing Director/CEO, Oliver Alawuba, attempted to downplay the drop in profit, insisting the bank’s performance “demonstrates resilience and diversification.”
However, critics argue that such remarks gloss over the bank’s declining profit margins and weak momentum despite heavy investments in technology and regional expansion.
While Alawuba attributed the “solid performance” to prudent balance sheet management and innovation, financial analysts point to rising operational costs, forex volatility, and low-interest margins as likely culprits behind the poor showing.
Even UBA’s much-publicised recapitalisation effort — touted as a success by management — underscores the bank’s growing dependence on capital injections to stay compliant with regulatory thresholds rather than generating sufficient returns from operations.
Analysts question sustainability
The bank’s Executive Director for Finance and Risk, Ugo Nwaghodoh, acknowledged that asset and deposit growth were “steady,” but did not provide clarity on why profitability continues to lag behind peers despite these expansions.
Analysts warn that if UBA’s cost-to-income ratio and risk exposure are not better managed, the group could face profit compression and investor fatigue in the coming quarters.
UBA’s insistence that its “capital adequacy and liquidity ratios remain above regulatory thresholds” may reassure regulators — but it does little to calm shareholders frustrated by falling profit growth and weak returns.
A bank losing its edge
Though UBA remains one of Africa’s largest banks — operating in 20 African countries as well as the UK, US, France, and the UAE — the latest results expose a pattern of slowing momentum and profit erosion that could threaten its competitive edge if left unchecked.
With profit before tax down, growth nearly flat, and investor confidence waning, the so-called “Africa’s Global Bank” faces growing questions over whether its expansion strategy is sustainable or simply overstretched.
