Nigeria’s tier-one lenders, Zenith Bank Plc and United Bank for Africa (UBA) Plc, have once again delivered strong numbers in their half-year 2025 results.
Both banks continue to compete for market share and investor confidence, but their strategies and financial outcomes show interesting differences.
Market performance
UBA’s share price has been on an impressive run. From N8.29 at the beginning of 2023, it has surged to N44.20, reflecting a CAGR of 86%.
In 2024, the stock gained 33% year-to-date (YtD), and so far in 2025 it is up another 26.5%.
Zenith Bank, meanwhile, has also made gains though at a slower pace. Its shares have risen from N23.93 in early 2023 to N64, representing a CAGR of 44%. The stock advanced 18% YtD in 2024 and has already returned 44% in 2025, reflecting stronger recent momentum.
The takeaway: UBA’s stock has been the longer-term outperformer, but Zenith has stolen the spotlight in 2025.
Profitability: different journeys to profit
Zenith Bank closed H1 2025 with a pre-tax profit of N625.6 billion, a 13.9% decline year-on-year, due to impairment charges and decline in net trading gains.
UBA, on the other hand, reported N388.4 billion in pre-tax profit, only 3.3% lower than H1 2024, showing resilience even as trading and revaluation gains slumped.
Over the last five years, UBA has grown faster on the bottom line, delivering N1.73 trillion PAT at a CAGR of 47.7%, compared to Zenith’s N2.41 trillion PAT at a CAGR of 35%.
Yet, Zenith’s profit base remains larger.
The engine room: Interest income and costs
Both lenders benefited from the high-yield environment:
- Zenith raked in N1.84 trillion interest income, up from N1.15 trillion in H1 2024, powered by loans (N935.7 billion) and treasury bills (N522.8 billion).
- UBA earned N1.33 trillion, up from N1.00 trillion, with loans (N420.5 billion) and treasury bills (N366.4 billion) as key contributors.
But costs rose in tandem. Interest expenses climbed for both, around N485 billion each, largely driven by customer deposits.
This left Zenith with a hefty N1.36 trillion net interest income, almost double that of H1 2024, while UBA posted N773.0 billion, a steadier 15% growth.
Verdict: Zenith outperformed UBA in the core lending engine room, thanks to stronger loan and treasury bill yields, leaving it with a much bigger net interest income cushion.
The drag: Impairment charges
The major divergence came from credit risk provisioning.
Zenith was hit hard, with impairment charges surging to about N760.8 billion in H1 2025, almost double the prior year, as expected credit losses on financial instruments spiked. This wiped out a hefty portion of its net interest gains.
UBA, by contrast, recorded a much lighter impairment charge of just N35.2 billion, down sharply from N58.6 billion in H1 2024.
Verdict: After provisions, UBA pulled ahead posting net interest income after impairments of about N738 billion, well above Zenith’s N594 billion.
Non-interest income: Fees and trading
The picture was equally mixed outside the lending book.
- UBA led the pack in fees and commission, generating N253.6 billion, largely from its robust e-business platforms, though slightly below last year’s level.
- Zenith, on the other hand, booked N197.4 billion, with account maintenance charges as its top contributor.
Verdict: UBA takes the clear lead in fee-based income, leveraging its digital and transaction platforms to outpace Zenith.
Trading and FX:
- UBA stumbled badly here. Instead of boosting profits, its trading and FX line showed a N10 billion loss; a big swing from the N98 billion gain last year. The problem was simple: the bumper FX revaluation gains of 2024 shrank dramatically this year, and even though losses on derivatives were smaller, it wasn’t enough to save the line.
- Zenith told a very different story. It still pulled in nearly N468 billion from trading and FX, even though that was lower than last year. Strong income from its trading books gave it a huge cushion, keeping profits steady.
Verdict: UBA got caught on the wrong side of FX swings, while Zenith leaned on its trading strength to stay ahead
Balance sheet: Scale and deployment
Both banks continue to strengthen their balance sheets:
- UBA: N33.27 trillion in assets, N24.19 trillion in deposits, N7.75 trillion in loans. Loan-to-deposit ratio: 32%.
- Zenith: N30.99 trillion in assets, N23.48 trillion in deposits, N9.60 trillion in loans. Loan-to-deposit ratio: 41%.
UBA runs a larger balance sheet but deploys deposits more conservatively, while Zenith channels a higher proportion into lending.
Dividends:
- UBA declared an interim dividend of N0.25 per share.
- Zenith declared N1.25 per share.
Valuation:
When it comes to valuation, the two banks tell very different stories.
UBA is trading like a hidden bargain.
- At a P/E ratio of just 1.97x and a P/B of 0.04x, investors are paying almost nothing for every naira of its book value.
- Its N1.76 trillion market capitalization is far below its N4.2 trillion net assets, suggesting the market has yet to fully price in the bank’s growth and earnings potential.
- In simple terms, UBA’s shares are cheap compared to the value sitting on its balance sheet.
Zenith Bank, on the other hand, is not as cheap.
- At a P/E of 2.42x and P/B of 0.59x, its stock trades closer to book value, reflecting the premium the market, places on its reputation for steady profitability and rich dividends.
- While its N2.7 trillion market cap also sits below its N4.57 trillion net assets, the gap is narrower than UBA’s.
Zenith’s higher P/E (2.42x vs. UBA’s 1.97x) means investors are willing to pay more for each naira of Zenith’s earnings, reflecting confidence in its consistency and dividend strength.
UBA’s lower P/E shows the market has not fully priced in its growth potential, leaving it positioned as the value play.
Overall, Zenith Bank and UBA both showed their strengths in H1 2025, but in different ways. Zenith leaned on its stronger lending yields and trading book to power income, though impairment charges weighed heavily.
UBA, meanwhile, kept provisions in check, grew fee income, and maintained profitability despite weaker FX gains.
For investors, the real story lies in valuation. Both banks are trading below book value, meaning the market has not fully priced in their asset strength
Well done.