United Bank for Africa (UBA) has announced its audited financial results for the full year ended December 31, 2024, reporting a post-tax profit of N766.5 billion, representing a 26.14% increase from the N607.6 billion posted in 2023.

The bank’s pre-tax profit rose marginally by 6.08% year-over-year (YoY) to N803.7 billion, reflecting steady growth despite rising operational costs and economic headwinds.

UBA’s performance is consistent with a trend seen across Nigeria’s banking sector, where major financial institutions have posted significant profits in the face of economic hardship. Much of this resilience has been attributed to foreign exchange (FX) revaluation gains, which have shielded banks from the full impact of Nigeria’s economic downturn.

Breakdown of UBA’s Performance

UBA’s interest income soared by 120.40% YoY to N2.3 trillion, up from N1 trillion in 2023. A significant portion of this income came from treasury bills (N678.4 billion), term loans to corporates (N569.1 billion), and bonds (N449 billion). Additional revenue sources included loans and advances to banks, overdrafts to corporates, and other lending channels.

The bank’s interest expenses surged by 128.18% to N839.2 billion, reflecting the higher cost of funds and the increased competition for deposits. A substantial part of these expenses stemmed from customer deposits, which accounted for 54.4% of the total interest cost.

However, UBA recorded a net interest income of N1.5 trillion, marking a 116.35% YoY increase from N707.5 billion in the previous year.

Another area of significant growth was in fees and commission income, which rose 91.66% YoY to N589 billion, driven largely by the expansion of UBA’s digital banking and electronic payment services. Electronic banking fees alone contributed N236.3 billion, underscoring the bank’s strategic focus on digital transformation.

However, fees and commission expenses also saw a sharp rise, jumping 97.88% to N233.9 billion, up from N118.2 billion in 2023. This increase was mainly due to higher transaction processing costs and regulatory charges.

One of the few areas where UBA posted a decline was in net trading and foreign exchange gains, which dropped 72.43% to N181.7 billion, compared to N659.2 billion in 2023. The bank’s reduced FX earnings indicate that despite benefiting from exchange rate adjustments earlier in the year, its forex position was less favorable in the latter months of 2024.

On a positive note, other operating income rose by 37.68% to N46 billion, fueled by dividend income (N16.8 billion) and other income sources (N28.2 billion).

Pre-tax profit, Dividend Payout, and Shareholder Returns

UBA’s pre-tax profit stood at N803.7 billion, a 6.08% increase from the N757.6 billion recorded in 2023. After accounting for taxes, the group’s post-tax profit climbed to N766.5 billion, representing a 26.14% increase YoY.

The bank also announced a final dividend of N3.00 per share, bringing the total dividend for 2024 to N5.00 per share. This payout is subject to withholding tax and will be disbursed to shareholders whose names are listed in the Register of Members as of the close of business on April 11, 2025.

Earnings per share (EPS) rose 24.24% to N21.73, up from N17.49 in the previous year, signaling stronger shareholder value creation.

Balance Sheet Growth and Asset Expansion

UBA’s total assets surged to N30.3 trillion, a 46.82% increase from N20.6 trillion in 2023. This expansion was driven by growth in investment securities, higher cash reserves, and an expanded loan book.

The largest asset component remained investment securities, which accounted for N12.535 trillion, followed by cash and bank balances totaling N8.1 trillion. Loans and advances to customers increased to N6.9 trillion, reflecting UBA’s continued efforts to support lending despite economic uncertainties.

Meanwhile, the bank’s total equity rose by 68.39% to N3.419 trillion, further solidifying its financial strength. Retained earnings also increased significantly by 54.92% to N1.4 trillion, indicating a healthy capacity for reinvestment and future expansion.

FX Windfall and Banking Sector Resilience

Over the past year, Nigerian banks have capitalized on the FX windfall resulting from the devaluation of the naira and volatility in the foreign exchange market. The Central Bank of Nigeria (CBN) undertook a series of policy adjustments, including the unification of exchange rates and the liberalization of forex trading, which led to the naira’s sharp depreciation.

For banks with significant FX holdings, this translated into massive revaluation gains, as assets held in dollars surged in local currency terms. UBA, like its peers, leveraged this windfall to boost earnings, even as it faced challenges such as rising impairment charges and increased interest expenses.

Challenging Economic Realities

Despite its impressive results, UBA, like other Nigerian banks, faces growing macroeconomic challenges. The sharp rise in interest expenses and impairment charges highlights the increasing cost of doing business in Nigeria’s high-inflation environment.

Additionally, while the FX windfall provided a temporary earnings boost, fluctuating exchange rates and tighter monetary policies could limit future gains. The sharp decline in FX trading gains suggests that opportunities for banks to capitalize on forex movements may diminish going forward.

Moreover, the broader Nigerian economy continues to struggle with high borrowing costs, liquidity pressures, and fiscal uncertainty. If economic conditions worsen, banks may face higher loan defaults, tighter credit conditions, and reduced consumer spending, all of which could impact profitability in the coming year.

The Model Y, Tesla’s best-selling compact SUV, has seen surging popularity, especially with recent price adjustments and the $7,500 federal EV tax credit still applicable in 2025 (assuming no policy changes). A sell-out across 29 states could reflect a demand spike, possibly tied to seasonal buying (e.g., Q1 closeouts) or a refreshed model rollout like the Juniper variant. Tesla’s production, primarily from Giga Texas and Giga Shanghai, might be lagging due to supply chain issues, factory retooling, or prioritization of other models (e.g., Cybertruck ramp-up). This could deplete new inventory in these states. Tesla’s inventory isn’t uniform nationwide. States like Texas (near Giga Texas) or high-EV-adoption areas like Maryland might clear stock faster due to proximity or market preferences.

Tesla often shifts focus to custom orders when pre-built inventory runs low. A “sold out” claim might mean showroom/demo stock is gone, but buyers can still order for later delivery. If true, immediate buyers in these states might face delays or turn to used Model Ys, potentially driving up secondary market prices. Posts on X hint at excitement over this scarcity, suggesting Tesla’s brand strength. Depleted inventory could signal Tesla pushing production limits or intentionally tightening supply to maintain pricing power—common in their playbook. A multi-state sell-out underscores EVs’ growing foothold, especially in conservative states like Alabama or Mississippi, alongside EV-friendly ones like Maryland.

Tesla has faced a variety of production challenges in 2025 that could contribute to the reported sell-out of new Model Y inventory across multiple U.S. states. While a complete sell-out suggests strong demand, it could also reflect supply-side bottlenecks limiting available stock. Tesla has encountered difficulties securing domestically sourced components for its electric vehicles (EVs) and lithium-ion batteries. Global supply chain issues, including shortages of semiconductors and raw materials like lithium and nickel, have persisted into 2025. These constraints could reduce production output at key facilities like Giga Texas and Giga Shanghai, potentially explaining low inventory levels in states like Texas, Michigan, and others.

For instance, battery supply issues have been flagged as a significant hurdle, with X users suggesting that Tesla’s battery factory is struggling to meet demand. This aligns with Elon Musk’s past comments about the complexity of battery production, which involves dozens of cell variants Tesla aims to streamline. Reports that Giga Austin is “not running well,” with potential halts in Cybertruck deliveries. While Tesla’s Q4 2024 production numbers (459,000 vehicles) were robust, any slowdown in Texas—where Model Y is a primary output—could tighten supply in nearby states like Oklahoma, Arkansas, and Missouri.

European production has faced challenges, with demand in Europe reportedly so low that Giga Berlin operates at a fraction of its 1-million-vehicle annual capacity (around 250,000 units). However, a transition to a new Model Y variant has also slowed output, as confirmed by Tesla GigaBerlin’s Factory Director. This could indirectly affect U.S. inventory if resources are reallocated. As a major exporter to the U.S., any production hiccups in China—due to competition from BYD or geopolitical tensions—might limit Model Y shipments, impacting states like Hawaii or Maryland.

Tesla is reportedly shifting production lines to accommodate a refreshed Model Y (possibly the Juniper variant) and preparing for a lower-cost vehicle slated for mid-2025. Retooling factories, as seen with the Model Y transition in Berlin, often reduces output temporarily. This could explain why new inventory is depleted across 29 states, as Tesla prioritizes future models over current stock replenishment. Historically, Tesla has struggled to scale production efficiently. Elon Musk has called scaling “1,000% to 10,000% harder than making prototypes,” a sentiment echoed in past Reuters reports. In 2025, ramping up Cybertruck production and preparing for a new affordable EV (expected H2 2025) have stretched resources.

Tesla’s 2024 delivery numbers (1.79 million vehicles) marked its first annual decline, with Q1 2025 forecasts at 367,000—down from 386,810 in Q1 2024. While the sell-out might indicate high demand, analysts argue Tesla faces a “demand problem,” with unsold inventory (47,000 units in Q4 2024) piling up earlier this year. Production challenges could exacerbate this by failing to meet even softened demand, depleting stock in states like Georgia, Virginia, and Utah. Posts on X and articles from sources like MotorTrend highlight internal chaos, with claims of “messy” manufacturing, unmet quotas, and reps “making up lies to buy time.”

Musk’s focus on side ventures (e.g., Department of Government Efficiency) has drawn criticism from investors like Christopher Tsai, suggesting distracted leadership might hinder production fixes. Tesla’s aging lineup—Model Y launched in 2020—faces stiff competition from cheaper Chinese EVs like BYD’s offerings, potentially forcing price cuts that squeeze margins and limit funds for production expansion. Supply chain woes, factory inefficiencies, and retooling have capped the number of Model Ys produced, leading to rapid depletion of pre-built stock. Tesla might prioritize high-demand markets (e.g., California, unlisted here) or custom orders over stocking showrooms in less dense states like Wyoming or Montana.

Looking Ahead

Tesla’s production challenges in 2025 could ease if Giga Texas stabilizes, the Model Y refresh completes, and supply chains recover. Musk’s promise of 20-30% delivery growth in 2025 hinges on starting production of a cheaper EV in Texas by mid-year, but skepticism remains due to these persistent hurdles. For now, the sell-out might reflect both Tesla’s popularity and its struggle to keep pace—a bittersweet testament to its market position.