UIB's Second Quarter 2025 Results: A Challenging Environment
The second quarter of 2025 marks the first period after the revision of the key interest rate by the Central Bank of Tunisia. The UIB's net banking income (PNB) stood at 132,997 MTND, a slight decrease of 1.1% compared to the same period in 2024.
Interest Margin Under Pressure
The interest margin totaled 72,407 MTND, down from 77,136 MTND in the same period in 2024. The impact of the decline in interest rates is clear. Net commissions on products increased by 3.5% to 38,386 MTND, while revenue from the securities portfolio and commercial and investment titles drained 21,604 MTND.
First Half 2025 Results
For the entire first half of 2025, the UIB posted a PNB of 258,905 MTND, compared to 267,000 MTND at the end of June 2024. The bank's interest income decreased by 0.8% year-over-year to 332,287 MTND. The interest margin fell by 8.2% to 142,176 MTND, confirming that this component of the PNB will continue to weigh on the sector's revenue.
Operating Expenses on the Rise
Operating expenses increased by 8.1% over the first half of 2025 to 146,558 MTND. The cost-to-income ratio stood at 56.6%, compared to 50.8% a year earlier, a deterioration explained by the unfavorable evolution of two parameters of this ratio.
Commercial Activity
The UIB's deposits reached 7,077,521 MTND (217,554 MTND more than in December 2024), while net credit outstanding stood at 6,340,157 MTND (127,580 MTND more than in December 2024). As most of the additional deposits are remunerated, this will further erode the interest margin in the coming months. With the rise of risks in the economy, credit granting is becoming mechanically tighter.
Outlook
The UIB is the only bank that publishes its gross operating income on a quarterly basis. As of the end of June 2024, it decreased by 14.8% to 112,600 MTND. For the first half, the net profit would, barring exceptional items, be marked by a decline. The market must understand that this is a logical consequence of the monetary policy implemented by the Central Bank of Tunisia. It is now necessary to expect the same trend for the entire sector.
