United Bank for Africa Plc (UBA) has released its audited financial statements for the year ended December 31, 2024, reporting a pre-tax profit of N803.7 billion, a 6% increase from the N757.6 billion recorded in the previous year.
Post-tax profit for the group surged by 26.14% to N766.5 billion, up from N607.6 billion in 2023. This represents the highest annual profit ever recorded by the bank, solidifying its status as one of Nigeria’s most consistently performing financial institutions.
Over the last two years alone, UBA has reported a cumulative profit of N1.37 trillion, a sharp contrast to the N570.4 billion it posted in the five-year period leading up to 2023, according to Nairametrics estimates.
As part of its earnings announcement, the bank proposed a final dividend of N3.00 per share, bringing its total dividend payout from 2024 profits to over N170 billion.
UBA, one of Nigeria’s FUGAZ banks (FirstHoldCo, UBA, GTCO, Access Holdings, and Zenith Bank), also reported a significant increase in total assets, which grew to N30.3 trillion, representing an addition of N9.7 trillion from the N20.65 trillion reported in 2023.
The bank becomes the first among Nigeria’s Tier-1 lenders to release its 2024 full-year results, which had been highly anticipated by investors amid a declining stock market.
Key highlights (2023 vs. 2024)
- Interest income: N2.3 trillion, +120.40% YoY
- Interest expenses: N839.2 billion, +128.18% YoY
- Net interest income: N1.5 trillion, +116.35% YoY
- Impairment charges on financial instruments: N253.565 billion, +22.71% YoY
- Net interest income after impairment on financial instruments: N1.277 trillion, +154.98% YoY
- Fees and commission income: N589 billion, +91.66% YoY
- Fees and commission expenses: N233.9 billion, +97.88% YoY
- Net trading and FX gain: N181.7 billion, -72.43% YoY
- Other operating income: N46 billion, +37.68% YoY
- Pre-tax profit: N803.7 billion, +6.08% YoY
- Post-tax profit: N766.5 billion, +26.14%
- Earnings per share: N21.73, +24.24% YoY
- Total Assets: N30.3 trillion, +46.82% YoY
- Retained earnings: N1.4 trillion, +54.92% YoY
- Total Equity: N3.419 trillion, +4=68.39% YoY
How UBA made its record profits
A breakdown of UBA’s numbers shows its earnings were driven primarily by interest income, as the bank benefitted from a high interest rate environment in 2024.
- Net interest income stood at N1.5 trillion, driven by strong earnings from loans and advances, as well as significant investments in risk-free government securities such as treasury bills.
- Investment securities alone delivered N1.1 trillion in gross interest income, accounting for nearly half of the bank’s N2.3 trillion in total interest earnings.
The elevated interest rate environment in Nigeria during the year led to a strong demand for treasury instruments. While banks capitalized on the yield opportunity, borrowers became more cautious, leading to reduced demand for credit.
- On the cost side, interest expenses nearly tripled, rising by 128.18% year-on-year to N839.2 billion, reflecting the increased cost of funds amid tight monetary conditions.
- UBA also posted N355 billion in fees and commission income, largely driven by its electronic banking business.
- The bank earned about N236 billion from electronic-related fees—charges on transactions conducted via ATMs, POS terminals, mobile banking, and card-based payments.
- However, fees and commission expenses also rose significantly by 97.88%, reaching N233.9 billion, compared to N118.2 billion in 2023.
While 2023 saw the bank posting outsized profits from foreign exchange gains, this year’s performance was more subdued in that segment.
Net trading and forex gains dropped to N181.7 billion, a steep decline from N659.2 billion in the prior year, reflecting lower reliance on forex volatility for profitability.
UBA also proposed a dividend per share of N3 which when combined with its interim dividend of N2 takes its total dividend to N5 per share. This is also a record dividend for the bank, per Nairametrics research.
African operations take the lead
An interesting trend in UBA’s 2024 results is the growing contribution from its pan-African operations. According to the bank’s disclosures, about 51.7% of group revenue came from its Rest of Africa segment—businesses located outside Nigeria but within the African continent.
- This marks a significant shift compared to 2019 when UBA’s African subsidiaries contributed just 31% of total revenue.
- With operations in over 20 African countries, UBA continues to consolidate its position as one of Nigeria’s most successful cross-border banking institutions.
- Back home, Nigeria experienced relative exchange rate stability in the latter half of 2024, despite a full-year currency depreciation of over 40%.
- This likely contributed to the lower forex gains recorded during the year.
Balance sheet, capital raise, and share performance
UBA’s total assets of N30.3 trillion place it among the top three largest financial institutions in the country, trailing only Access Holdings and Zenith Bank. First Bank Holding Company (FirstHoldCo) is yet to release its full-year 2024 results.
- A large portion of UBA’s assets—about N21.8 trillion—comprises customer deposits, reflecting continued confidence in the bank’s deposit mobilization capabilities.
- The bank also reported shareholders’ funds of N3.3 trillion, including N115.8 billion in share capital.
- In November 2024, UBA launched the first tranche of its recapitalization plan—a N239.4 billion rights issue priced at N35 per share—as it moves toward meeting the Central Bank of Nigeria’s N500 billion minimum capital requirement.
- The bank is yet to report the status of the capital raise.
It is worth noting that under current regulations, banks are not permitted to count retained earnings or profits as part of share capital for recapitalization purposes.
Following the release of its earnings, UBA’s share price gained 4.48%, closing at N38.45 per share, as investors responded positively to the bank’s strong financial performance and dividend declaration.
