UBA profit falls 20% in Nigeria, windfall levy rises
The United Bank for Africa (UBA) saw its profit after tax fall by almost a fifth in Nigeria last year, while its earnings elsewhere jumped by 137.81 percent.
UBA’s group profit rose to N766.67 billion from N670.28 billion in the previous year. In its home market, operating expenses increased at a faster pace than total revenue, driving down its net income to N415.88 billion from N519.19 billion.
The Nigerian government imposed a N33.09 billion windfall levy on the bank’s realised profit from all foreign exchange transactions last year, up from N24.82 billion in 2023.
In July 2024, the National Assembly passed a bill which was later signed by the President in August 2024. The Finance (Amendment) Act 2023 imposed and charged windfall levy on banks.
UBA pointed out that the 2023 fiscal year was marked with a major devaluation of the naira against other foreign currencies, with deposit money banks that held FX assets in their books reporting significant FX gains.
It said: “As per the Act Section 29 A of the law, ‘There shall be levied and paid to the benefit of the Federal Government of Nigeria a levy 70% on the realised profits from all foreign exchange transactions of banks within the 2023 to 2025 financial years’.
“Following a series of engagements, provision of information, reconciliation meetings with the FIRS, a provisional windfall levy of N57.912 billion was estimated to be payable by the bank for the 2023 and 2024 financial years, broken down as follows FY2023: N24.819bn FY2024: N33.092bn.”
