Following the release of UBA's Q1'25 unaudited financials and subsequent adjustments to our assumptions, we now expect a 23.0% increase in FY'25 PBT to N988.8 billion, driven by the projected increases in net-interest income (+6.7% YoY) and non-interest revenue (+6.0% YoY). Additionally, we expect some cost relief from lower provisioning for loans and other financial assets compared to FY'24, driven by slower loan growth and a reduced cost of risk (CoR). However, tax expenses are likely to increase significantly, reflecting the absence of the sizable deferred tax assets recognised in FY'24. Hence, while we see scope for a strong double-digit growth in PBT, PAT is likely to rise by a modest 6.4% YoY to N815.8 billion in FY'25.
In addition, in the coming months, UBA is expected to announce the inflow from its phase 1 capital raise and adjust for the additional shares. We note the potential net implications on EPS, which we now forecast at N20.95 for FY’25 vs N21.73 in FY’24.
On its strategic outlay, UBA remains focused on strengthening its regional footprint and digital capabilities, supported by the imminent deployment of its capital raise proceeds. The bank plans to launch a Saudi Arabian subsidiary and anticipates regulatory approval for its France operations this year, reinforcing its international expansion drive.
