Nigeria’s tier-one lender, United Bank for Africa (UBA), has clarified that its decision to suspend dividend payments for the 2025 financial year is a strategic and regulatory-driven move, with a strong assurance of a rebound in shareholder returns by 2026.
The Group Managing Director/Chief Executive Officer, Oliver Alawuba, disclosed this during an interview on ARISE TV, where he addressed growing investor concerns over the bank’s dividend outlook.
Alawuba explained that the development stems from compliance with a directive issued by the Central Bank of Nigeria (CBN), which mandated banks operating under regulatory forbearance to exit the regime within a specified timeframe.
According to him, UBA took the necessary steps to comply, leading to the reclassification of certain credit facilities in line with prudential guidelines. This exercise resulted in substantial provisions estimated at about ₦331 billion, significantly impacting the bank’s asset quality metrics.
He noted that the provisioning spike pushed UBA’s non-performing loan (NPL) ratio above the regulatory threshold required to declare dividends, effectively forcing a pause in payouts despite the bank’s historically strong performance.
“UBA has maintained a consistent dividend culture over the years,” Alawuba stated, pointing out that the bank paid dividends consecutively from 2023 through the first half of 2025, often delivering attractive yields to shareholders.
Despite the temporary suspension, the UBA chief emphasised that the bank remains financially resilient, adding that the current clean-up of its loan book is designed to strengthen its balance sheet and position it for sustainable growth.
In a forward-looking stance, Alawuba revealed that UBA is ramping up recovery efforts on delinquent loans, with a firm commitment to pursue defaulters and improve asset quality across its portfolio.
“We are going after defaulters aggressively. The goal is to bring our loan performance metrics back within regulatory limits and return to dividend payments by 2026,” he said.
Industry analysts say the move reflects a broader trend in Nigeria’s banking sector, where tighter regulatory scrutiny is compelling lenders to prioritise risk management and capital preservation over short-term shareholder payouts.
While the dividend pause may dampen immediate investor sentiment, market watchers believe UBA’s decisive action could enhance long-term value, particularly if the bank succeeds in restoring its NPL ratio to compliant levels and sustaining profitability.
The development highlights the balancing act facing Nigerian banks—navigating evolving regulatory expectations while maintaining investor confidence in an increasingly competitive financial landscape.
UBA says its 2025 dividend suspension is temporary, citing ₦331bn provisions triggered by CBN directives. CEO Oliver Alawuba assures investors of a 2026 payout comeback as the bank intensifies loan recovery efforts.
UBA Boss explains its 2025 dividend pause due to regulatory compliance and ₦331bn provisions, pledging a strong return to payouts in 2026 through aggressive recovery of non-performing loans.
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