United Bank for Africa Plc (UBA) reported strong first-quarter earnings for 2025, revealing an impressive 35.1% y/y growth in earnings per share (EPS) to N5.35 (Q1-24: N3.96) and N599.83 billion in interest income.

The expansion in the group’s earnings was underpinned by impressive growth across its core (+36.1% y/y) and non-core (+44.2% y/y) income lines in the review period.

The group recorded a 36.1% y/y growth in interest income to N599.83 billion, supported by the still elevated yields amid an increase in the group’s earning assets (+3.1% YTD to N26.26 trillion).

Analysing by contributory lines, UBA recorded higher income from investment securities (+45.0% y/y to N291.86 billion), loans to customers (+17.4% y/y to N229.35 billion), placement with banks (+17.0% y/y to N47.42 billion), and loans to banks (+770.6% y/y to N31.20 billion).

UBA recorded a 77.0% y/y growth in interest expense to N247.96 billion, as the high interest rates also resulted in higher funding costs.

Parsing through the breakdown, the group incurred higher costs on its deposits – customers (+98.4% y/y to N167.82 billion) and banks (+85.8% y/y to N53.44 billion) – amid a soft decline in borrowing costs (-0.3% y/y to N26.33 billion).

Accordingly, the group’s net interest income grew by 17.0% y/yto N351.88 billion, while net interest income ex-LLE settled 13.6% y/yhigher at N337.70 billion after accounting for the N14.18 billion in impairment charges.

Further supporting earnings, non-interest income advanced during the period by 44.2% y/y to N112.36 billion, driven majorly by gains from net fees and commission income (+15.7% y/y to NGN71.96 billion) and investment securities (+230.6% y/y to N20.46 billion), which offset the declines in FX trading (-21.1% y/y) and FX revaluation gains (-1.4% y/y). Consequently, operating income rose by 19.9% y/y to N450.06 billion.

Further down, operating expenses grew by 12.3% y/yto N245.79 billion, triggered by increasing regulatory costs and persistent inflationary pressures.

The group incurred higher costs on personnel expenses (+27.2% y/y to N84.32 billion), AMCON (+28.4% y/y to N22.94 billion), and NDIC premium (+19.2% y/y to N12.83 billion). Nonetheless, given that the group’s operating income grew faster than its operating expenses, the cost-to-income ratio settled lower at 54.6% (Q1-24: 58.3%). Overall, profit before tax grew by 30.7% y/y to N204.27 billion, while profit after tax expanded by 33.1% y/yto N189.84 billion following a 4.8% year-over-year increase in income tax expense.