Zenith, UBA deliver strong half-year results as rivalry deepens

Nigeria’s tier-one lenders, Zenith Bank Plc and United Bank for Africa (UBA) Plc, have released their half-year 2025 financials, showing robust earnings but contrasting strategies that highlight their ongoing battle for market share, profitability, and investor appeal.

Stock Market Performance: UBA the Long-Term Star, Zenith Shines in 2025

UBA’s share price has been a standout performer over the last two years. Rising from N8.29 in early 2023 to N44.20, the stock has delivered a compound annual growth rate (CAGR) of 86%. After climbing 33% in 2024, it has added another 26.5% so far in 2025.

Zenith Bank has also delivered solid shareholder returns, though on a steadier path. Its stock advanced from N23.93 in early 2023 to N64, a CAGR of 44%. While gains were more modest in 2024 (18% YtD), Zenith has stormed back in 2025 with a 44% return year-to-date.

UBA has been the longer-term outperformer, but Zenith has taken the lead in 2025.

Zenith Bank reported N625.6 billion pre-tax profit in H1 2025, a 13.9% year-on-year decline, mainly due to rising impairment charges and weaker net trading gains.

UBA fared better, posting N388.4 billion pre-tax profit, just 3.3% lower than H1 2024, showing resilience in the face of declining FX and revaluation gains.

Over five years, UBA has grown profit faster, with N1.73 trillion PAT (CAGR 47.7%), compared to Zenith’s N2.41 trillion PAT (CAGR 35%).

Interest Income: Zenith raked in N1.84 trillion, up from N1.15 trillion, driven by loans (N935.7 billion) and treasury bills (N522.8 billion). UBA earned N1.33 trillion, supported by loans (N420.5 billion) and treasury bills (N366.4 billion).

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But Zenith’s gains were eroded by massive impairment charges of N760.8 billion, nearly double the prior year. UBA, in contrast, recorded a modest N35.2 billion, down from N58.6 billion.

Verdict: After provisions, UBA pulled ahead with N738 billion net interest income after impairments, compared to Zenith’s N594 billion.

Fee-Based Income: UBA earned N253.6 billion, driven by its digital and e-business platforms. Zenith posted N197.4 billion, with account maintenance charges its key source.

Verdict: UBA dominates fees and commissions, cementing its lead in digital transactions.

Trading & FX Income: Zenith posted N468 billion, cushioning its profits despite a decline from 2024. UBA, however, recorded a N10 billion trading loss, reversing last year’s N98 billion gain.

Verdict: Zenith leveraged its trading strength, while UBA stumbled on FX swings.

UBA boasts the bigger balance sheet with N33.27 trillion in assets and N24.19 trillion deposits, but its loan-to-deposit ratio (32%) shows a more conservative lending posture.

Zenith has N30.99 trillion in assets, N23.48 trillion deposits, and a more aggressive 41% loan-to-deposit ratio.

UBA: P/E of 1.97x, P/B of 0.04x, and market cap of N1.76 trillion against net assets of N4.2 trillion. Investors pay very little for its book value, leaving it deeply undervalued.

Zenith: P/E of 2.42x, P/B of 0.59x, and market cap of N2.7 trillion versus net assets of N4.57 trillion. Investors assign a premium for consistency and dividends.

For investors, the key lies in valuation—both stocks remain undervalued relative to book value, suggesting upside potential as Nigeria’s banking sector navigates a complex macroeconomic environment.