Analysis: UBA in 2026: Buy, Hold, or Sell?

United Bank for Africa Plc, one of Nigeria’s Tier 1 banks, last week released its 2025 full-year audited and Q1 2026 unaudited results.

The reports show that while profit declined both in the full year 2025 and Q1 2026, core income, measured by gross earnings and net interest income, recorded strong growth and remained stable in these periods.

The market has reacted sharply, with the shares dropping by 10% to N49.50 on Monday, April 27, 2026, from its Friday closing price of N55.

An important question for investors is: Is UBA a Buy, Hold, or Sell amid the reported decline in profit and the short-term share price drop?

First of all, let us look at the numbers very well and ask pertinent questions.

Are the UBA 2025 and Q1 2026 numbers a collapse?

UBA’s FY 2025 numbers look weak on the surface, but the real story is more complex.

Profit before tax dropped 47% to N423.4 billion, while profit after tax declined to N404.7 billion. EPS also fell sharply by 55% to N9.66.

But this is largely a base effect problem; FY 2024 was inflated by FX revaluation gains.

At first glance, this looks like a collapse, but did UBA have a bad year, or are we just coming back to reality?

2024 appears not to be normal as banks, including UBA, made massive gains from the naira devaluation. FX revaluation boosted earnings across the board.

For UBA, the 47% profit drop in 2025 in part reflects the absence of a one-off windfall.

The bottom-line performance for the 2025 financial year was impacted by an impairment charge of N331 billion and foreign currency revaluation loss of N4.9 billion compared to a gain of N293 billion in 2024.

These are non-recurrent and expected not to occur at least at that magnitude.

In Q1 2026, the Group continued with its strong top-line performance. The group’s gross earnings grew by 4.86% to N801.42 billion, driven by strong growth in interest and non-interest income.

The almost flat growth in interest expenses at just 1.91% to N257 billion, combined with the high interest income, gave a strong net interest income of N384 billion, up 10% YoY.

Given the Q1 impairment charges of about N41 billion, annualized, this suggests that UBA could achieve a net interest income after impairment charge of about N1.3 trillion; 6% higher than in 2025.

Despite the 56% drop in EPS in 2025, the 5-year compounded annual growth rate (CAGR) of 30% suggests that UBA’s valuation is attractive relative to its growth expectations.

At 12-month trailing earnings per share of N12.77, and at last week’s share price of N55, the P/E ratio stands at 4x, which is relatively cheap.

In addition, our multiple valuation metrics show that UBA still has an upside potential of over 68% in the next six months.

Although the stock appears undervalued at N49.50, the market environment remains challenging, with increasing impairment charges, operating expenses and a drop in the capital adequacy ratio to 23%

However, UBA has indicated that it has fortified its recovery team and is aggressively pursuing the recovery of impaired facilities, with these recoveries flowing straight through to the P&L in FY 2026 and beyond.

With a cheap valuation and strong upside potential, UBA appears an attractive buy, especially for long-term investors.