Uche Amunike
Lifeandtimes News Writer
United Bank for Africa (UBA) has reported a decline in profitability for the first quarter of 2026, even as the Group posted steady growth in earnings and maintained a resilient balance sheet.
For the three months ended March 31, 2026, gross earnings increased by 4.9% to ₦801.5 billion, supported by a 6.9% rise in interest income to ₦641.1 billion. Net interest income grew by 10.5% to ₦383.7 billion, while non-interest income recorded a strong 17.3% increase to ₦137.1 billion, reflecting improved diversification across revenue streams.
Operating income rose by 12.2% to ₦520.8 billion. However, the gains were outweighed by a sharp 29.8% jump in operating expenses, which climbed to ₦319.0 billion, significantly impacting the Group’s bottom line.
Consequently, profit before tax declined by 21.4% to ₦160.7 billion, compared to ₦204.3 billion recorded in the same period of 2025. Profit after tax also fell by 22.8% to ₦146.6 billion, while earnings per share dropped by 41.9% to ₦3.11.
Despite the decline in profits, UBA’s financial position remained stable. Total assets stood at ₦33.1 trillion, while loans and advances to customers grew by 2.1% to ₦7.17 trillion, reflecting cautious lending expansion. Customer deposits declined by 3.7% to ₦26.2 trillion, while shareholders’ funds rose slightly by 1.4% to ₦4.31 trillion.
Key performance indicators showed mixed trends. The cost-to-income ratio increased to 61.2%, indicating higher operating costs, while net interest margin declined to 6.49%. On the positive side, return on average equity improved to 13.7% from 10.55%, and return on assets rose to 1.77% from 1.27%, suggesting more efficient use of capital and assets. The cost of risk also dropped significantly by 36.5% to 2.02%, reflecting improved credit quality.
Commenting on the results, Group Managing Director Oliver Alawuba said the performance underscores the strength of UBA’s Pan-African model and aligns with expectations of a transition year following recapitalisation. He noted that the Group is focused on disciplined provisioning, strategic investments, and building sustainable, high-quality earnings.
According to Alawuba, the ongoing digital investments and regional diversification are enhancing revenue resilience and positioning the bank for long-term growth, with continued emphasis on financial inclusion and intra-African trade.
The Executive Director for Finance and Risk Management, Ugo Nwaghodoh, on his part, stated that the results reflect a normalising earnings environment and improved balance sheet strength. He highlighted that UBA remains well-capitalised and liquid, with a diversified funding base supporting its operations.
Overall, UBA’s first quarter results for the year 2026 reflect solid revenue growth and improved asset quality, but also highlight the impact of rising costs on profitability as the Group continues to invest in future growth and scalability.
Looking ahead, management is expected to prioritize cost optimization while sustaining revenue momentum through digital channels and cross-border opportunities. Investors will watch closely for expense moderation, deposit recovery, and continued improvements in margins and efficiency ratios over the coming quarters. Execution on these fronts could support a rebound in profitability and strengthen market confidence further.
