UBA STOCK LANGUISHES AT A DISCOUNT AFTER A CATACLYSMIC PROFIT FALL
UBA is trading at a clear discount to its tier-1 peers in both price and valuation heading into 2026, and the reason is rooted in 2025. As of recent market data, UBA trades around N45.50 per share with a 52-week range of N34.25 – N55.20 and a trailing P/E of 6.12x. By contrast, the market is paying a premium for GTCO and Zenith: GTCO closed July at N131.00 per share with a market cap of N4.75 trillion, while Zenith stood at N124.90 per share and was the first Nigerian bank to cross N5 trillion in market value. Analysts note UBA trades at roughly 5.66x P/E versus richer multiples for GTCO and Zenith, and with a July market cap of N1.97 trillion it sits well behind GTCO’s N4.75 trillion and Zenith’s N5.07 trillion.
That valuation gap did not appear by accident. It follows United Bank for Africa Plc’s cataclysmic profit fall in 2025. The bank’s profit for the year collapsed by 47.2% to N404.7 billion, from N766.6 billion in 2024. Earnings per share was cut in half, dropping to N9.66 from N21.73. It is the sharpest year-on-year decline in UBA’s recent history, and it happened despite growth in assets, deposits and capital.
The fall was not gradual. It was driven by two massive hits that wiped out nearly N470 billion in potential earnings. First, credit costs exploded. Impairment charges on loans jumped 52.6% to N331.1 billion from N217.0 billion in 2024. In a year of high inflation, elevated interest rates and Naira pressure, borrowers struggled. UBA chose to book the losses early, but the charge alone erased 43% of the prior year’s profit.
Second, currency and trading operations swung violently. UBA recorded a net trading and foreign exchange loss of N140.6 billion, a reversal from a gain of N181.8 billion in 2024. That N322.4 billion negative swing reflects mismatches between assets and liabilities across the bank’s 20-country network as the Naira remained volatile. Hedging did not keep pace with the market.
Funding costs compounded the damage. Interest expense rose 20% to N1.03 trillion from N859.2 billion, as deposits repriced higher in the CBN’s tight monetary cycle. Interest income grew slower at 9.8% to N2.65 trillion, lifted by a 30.5% increase in amortized cost securities to N9.91 trillion. The result: net interest income crawled up just 4.2% to N1.62 trillion, unable to offset the losses elsewhere.
Other lines could not fill the gap. Net fee and commission income was flat at N332.5 billion. Employee benefit expenses rose 18.9% to N376.3 billion. Depreciation jumped 37.2% to N66.7 billion. Profit before tax fell 47.3% to N423.4 billion.
Yet the collapse in earnings did not translate into a collapse of the bank. That is the contradiction at the heart of 2025. Total assets grew 9.4% to N33.17 trillion. Customer deposits rose 11% to N23.95 trillion. Cash and bank balances stood at N8.95 trillion. Investment securities climbed to N14.43 trillion. To absorb shocks, UBA also raised capital. Equity attributable to owners increased 24.3% to N4.12 trillion, with share capital and premium rising to N504.7 billion from N115.8 billion. Liquidity and solvency ratios remained strong.
The impact across UBA’s key constituencies was uneven and harsh. Shareholders bore the brunt with profit and EPS more than halved. Depositors saw safety: a bigger, more liquid bank with N23.9 trillion in deposits. Regulators got prudence in the form of higher provisions and a shift from loans to securities. Employees got cost protection as staff expenses rose in an inflationary year. The economy got funding, as UBA’s N14.4 trillion securities book financed government, and N54.8 billion in exchange translation gains from foreign operations supported Nigeria’s FX position.
It is this earnings breakdown that explains the discount the market has applied. While GTCO and Zenith are rewarded with premium multiples for perceived efficiency and domestic dominance, UBA is priced like a riskier, harder-to-model pan-African story.
That discount is now why brokers are fighting back in 2026. Blue Marina, Arthur Steven and Meristem have all issued Buy ratings on UBA with an average target of N59.92, implying about 46% upside, and CardinalStone pegs fair value at N63.99 vs a recent close of N43.75. The thesis is simple — investors see UBA’s “cheap” valuation as an opportunity to rotate back in ahead of a potential rerating, betting that impairments ease and FX stabilizes.
UBA in 2025 did not sacrifice profit as strategy. It suffered a cataclysmic profit fall because credit risk, FX volatility and funding costs hit at the same time. The bank used its size to stay liquid and solvent. For now, the figures are clear: a N361.9 billion drop in profit, a N322.4 billion swing in FX/trading, and a bank that grew stronger on the balance sheet even as earnings broke — and as a result, a stock that still trades at a discount to the peers it once ran with.
