KARACHI: United Bank Limited (UBL) on Wednesday declared Rs32.06 billion as profit after tax for the year ended December 31, 2022.
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Pakistani bank penalized for frivolous litigation
ISLAMABAD: A Pakistani commercial bank has been penalized by the country’s president for filing frivolous representation.
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UBL announces 18% decline in net profit on huge tax payment
KARACHI: United Bank Limited (UBL) has posted 18 per cent decline in net profit to Rs18.76 billion for the nine months period ended September 30, 2022.
The profit after tax of the bank was Rs22.76 billion in the same months of the last year, according to financial results of the bank submitted to the Pakistan Stock Exchange (PSX).
Bank has declared earnings per share for the period at Rs15.33 as compared with EPS of Rs18.59 in the nine months period ended September 30, 2021.
The decline in net profit may be attributed to massive surged in payment of income tax during the period. The bank paid an amount of Rs31.89 billion for the period January – September 2022 when compared with Rs16.56 billion in the same period of the last year.
Board of directors of the bank met on Wednesday October 19, 2022 to approve the financial results for the nine months ended September 30, 2022. The board approved an interim cash dividend for the nine months ended September 30, 2022 at Rs4 per share i.e. 40 per cent. This is in addition to interim dividend already paid at Rs9 per share i.e. 90 per cent.
According to the financial results, the bank recorded an increase in net mark-up/interest income to Rs72.77 billion during first nine months of the current year as compared with Rs53.68 billion in the same months of the last year.
Total non mark-up / interest income also increased to Rs22.12 billion as against Rs17.28 billion. Out of non mark-up/interest income the bank made huge gain of Rs7.63 billion as foreign exchange income during first nine months of the current year as compared with Rs2.56 billion in the same period of the last year.
Total income of the bank rose to Rs94.89 billion when compared with Rs70.97 billion.
Operating expenses of the bank grew to Rs37.77 billion from Rs31.2 billion. The bank recorded profit before tax at Rs50.65 billion during January – September 2022 as compared with Rs39.32 billion in the same period of the last year.
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UBL declares 21% decline in half year net profit
KARACHI: United Bank Limited (UBL), the leading bank of Pakistan, on Wednesday declared 21 per cent fall in it after tax profit for the hear year ended June 30, 2022.
According to unconsolidated financial results submitted to Pakistan Stock Exchange (PSX), the bank declared Rs11.86 billion profit after tax for the half year ended June 30, 2022 as compared with Rs15.00 billion in the same half of the last year.
READ MORE: Bank Alfalah posts 25% increase in half year profit
UBL announced Earnings Per Share (EPS) at Rs9.69 for the half year ended June 30, 2022 as compared with EPS Rs12.25 in the same half of the last year.
The board of directors of UBL in a meeting held on Wednesday August 3, 2022 in Islamabad recommended an interim cash dividend for the half year ended June 30, 2022 at Rs4 per share i.e. 40 per cent. This is addition to interim dividend already paid at Rs5 per share i.e. 50 per cent.
READ MORE: Pakistan Tobacco’s profit falls on high taxes
Net mark-up income / interest income of the bank increased to Rs45.11 billion for the half year under review as compared with Rs35.09 billion in the same half of the last year.
The non mark-up income of the bank sharply increased to Rs14.70 billion during January – June 2022 as compared with Rs11.43 billion in the same period last year.
READ MORE: Habib Bank posts 33% decline in half year profit
Total income for the half year under review surged to Rs59.81 billion as against Rs46.52 billion.
Operating expenses of the bank increased to Rs24.09 billion for the half year ended June 30, 2022 as compared with Rs20.20 billion in the same period last year.
The bank paid tax to the tune of Rs22.37 billion for the half year ended June 30, 2022 as compared with Rs10.85 billion.
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Sri Lankan default impact on Pakistani banks
KARACHI: Pakistani banks operating in Sri Lanka will have adverse effect on their books due to declaration of Sri Lanka for failure to repay its foreign debt.
In a recent development, Sri Lanka announced that it would be defaulting on its external obligations due to dwindling foreign exchange reserves.
Sri Lanka’s total external debt currently stands at $51 billion, i.e. 60 per cent of GDP.
As per foreign news agency, Sri-Lanka has to make a foreign repayment of $4 billion, including $1 billion sovereign bond maturing in July 2022.
Insight Securities said that its banking universe including UBL, MCB, HBL, and BAHL holds Sri Lanka sovereign instruments in their investment book (both USD denominated & Local currency), may result in revaluation loss or provision charge.
Sri-Lanka’s central bank governor said that this suspension of payment would be placed until the country reaches an agreement with creditors and alongside with the International Monetary Fund (IMF).
The analysts believed that this declaration of default will only affect USD denominated bonds while the CBSL (Central bank of Sri Lanka) will continue to honor domestic bonds i.e. T-bills. However, disclosure of local and USD-denominated sovereign bonds is not available in respective banks financials.
It is worth mentioning that these above abstracts are based on the CY21 financial statement, and there is a possibility that these banks have already reduced their exposure before the default announcement.
Analysts at Arif Habib Limited said that the economic crisis in Sri Lanka seems to be worsening with the authorities announcing temporarily default on its foreign debts.
With more than $50 billion in external debt and foreign exchange reserves hovering around $1.9 billion (last month), the country is currently struggling to make payments on its international sovereign bonds.
Media sources suggest, this week $36 million interest payment is due on a Sri-Lanka’s 2023 dollar bond as well as $42.2 million on 2028 note.
Moreover, a $1 billion sovereign bond is maturing on July 25th, 2022.
The extraordinary measure taken by the Sri-Lankan authorities to halt payments on foreign debt is to preserve its dwindling reserves for the purpose of importation of essentials such as food, fuel and medicine.
Going forward, the analysts believe, the options available to the Sri-Lankan government include: negotiation of a settlement in which bondholders are given new bonds that are worth less but help provide some partial compensation, or restructuring of the current one with the support of IMF which media sources claim to be likely Sri Lanka’s strategy.
It is pertinent to note here that some of the Pakistani banks are exposed to the Sri-Lankan economy either through branch banking or investments in the government debt securities.
Amongst our AHL coverage banks, MCB has eight branches in the Lankan territory while HBL operates with three branches in the country.
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United Bank posts Rs30.62 billion net profit for 2021
KARACHI: United Bank Limited (UBL) on Wednesday posted Rs30.62 billion profit after tax for the year ended December 31, 2021, according to financial results submitted to Pakistan Stock Exchange (PSX)
The bank registered 47 per cent growth in profit after tax for the year under review as compared with Rs20.78 billion in the preceding year.
The bank announced earnings per share at Rs24.84 for the year ended December 31, 2021 as compared with Rs17.10 in the preceding year.
READ MORE: UBL gets DD approval to acquire Telenor Microfinance Bank
Analysts at Arif Habib Limited said that the earnings jumped mainly on the back of reversals in provisioning and a surge in net fee income (NFI).
The bank announced a dividend of Rs6.00 per share for the quarter taking total payout to PKR 18.00 per share for the year ended December 31, 2021.
Net Interest Income (NII) of the bank settled at Rs74.7bn during the year under review, decreasing 3 per cent Year on Year YoY/ 2 per cent Quarter on Quarter (QoQ) attributable to significant rate hikes during the previous year leading to sharp increase in interest expense.
READ MORE: UBL declares 42% growth in net profit in nine months
NFI depicted a rise of 29 per cent YoY mainly due to massive jump in capital gains (469 per cent YoY) followed by higher dividend income (80 per cent YoY) and foreign exchange income (8 per cent YoY). On a sequential basis, NFI was up 19 per cent QoQ mainly due to a 23 per cent QoQ jump in Fee income.
The bank booked a net reversal of Rs1.5 billion in the year ended December 31, 2021 compared to huge provisioning of Rs17.2 billion during the preceding year. This could be on the back of stronger economic activity and improved asset quality helping the bank to book reversals against Non-Performing Loans (NPLs).
The bank’s operating expenses rose 9 per cent YoY/16 per cent QoQ. Cost/Income clocked-in at 49 per cent during the year under review compared to 46 per cent same period last year.
Effective tax rate was set at 41 per cent during the year ended December 31, 2021 compared to 39 per cent in the preceding year.
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UBL gets DD approval to acquire Telenor Microfinance Bank
KARACHI: United Bank Limited (UBL) has been granted regulatory approval to commence due diligence (DD) of Telenor Microfinance Bank Limited.
In a communication shared with the Pakistan Stock Exchange (PSX) on Tuesday, UBL said that the State Bank of Pakistan (SBP) had granted in-principle approval to UBL to commence the due diligence of Telenor Microfinance Bank Limited (TMB) for proposed acquisition of 55 per cent sponsor shares in TMB, currency held by Telenor Pakistan BV (operating under the Easypaisa brand name), subject to the compliance with the applicable laws, rules, regulations.
It was second approval granted by the SBP in less than two weeks to UBL to initiate due diligence in two different acquisitions.
On January 26, 2022, the bank informed the PSX that that SBP had granted in-principle approval to UBL to commence the due diligence of Samba Bank Limited in respect of acquisition of 84.51 per cent shareholding of SBL, currently held by Saudi National Bank.
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Ufone signs Rs21 billion agreement for 4G spectrum
ISLAMABAD: Pakistani Telecom Company, Ufone has secured its largest syndicated financing facility jointly led by MCB Bank Limited (MCB) (Agent bank), Allied Bank Limited (ABL), Bank of Punjab (BoP), National Bank of Pakistan (NBP), and United Bank Limited (UBL) to fund the acquisition and rollout of its 4G services across Pakistan.
President and Group CEO, PTCL & Ufone, HatemBamatraf signed the agreement for the syndicated financing of PKR 21 billion at a ceremony held in Islamabad, which was also attended by President, MCB Bank, Imran Maqbool; Group Head, Corporate Finance & International Banking, MCB Bank, Mr. ShoaibMumtaz; President Allied Bank, AizidRazzaq Gill; Chief, Corporate & Investment Banking, Allied Bank, OwaisShahid; Head Investment Banking, Bank of Punjab, Umer Khan, AbidKitchlew Divisional Head C&IBG, National Bank, and Farooq Ahmed Khan Group Head Corporate & Investment Banking, United Bank Ltd .
Ufone has recently been awarded 4G Spectrum License as a result of competitive bidding during the spectrum auction held by the Pakistan Telecommunication Authority (PTA). The company’s investment in 4G spectrum will go onto enhancing its network capacity and readiness besides delivering superior connectivity and user experience to its customers.
Speaking at the ceremony President and Group CEO, PTCL & Ufone, HatemBamatraf expressed his gratitude to the banking consortium for the timely financial support and said “The Financing Solution will go a long way in bringing high quality mobile broadband services to the people of Pakistan. It will improve quality of network services and usher in a host of socio-economic opportunities for growth and development for our customers” He further added “ It is a mutual goal that both Pakistan’s banking and telecom industries are working to achieve in order to create shared value for the communities we serve.”
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SBP slaps Rs280 million penalty on National Bank
KARACHI: The State Bank of Pakistan (SBP) has slapped a heavy monetary penalty of over Rs280 million on the National Bank of Pakistan (NBP) for violating instructions pertaining to Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT).
The central bank imposed a monetary penalty on four banks during the quarter ended September 30, 2021. The SBP imposed Rs465 million as monetary penalties on the four banks for similar deviation.
The SBP imposed a penalty of Rs132.44 million on Silk Bank Limited, Rs38.55 million on United Bank Limited and Rs13.54 million on Industrial and Commercial Bank of China-Pakistan Branches.
In addition to penal action, the banks have been advised to strengthen its processes with respect to identified areas.
The SBP from July 2019 started public disclosure of penal action against banks. “Enforcement actions are an integral part of a regulatory regime which involves the imposition of monetary penalties and other actions against institutions and individuals for violations of laws, rules, regulations, guidelines or directives issued by SBP from time to time,” according to a circular issued by the central bank.
In order to bring more transparency and strengthen market discipline, SBP has decided to publicly disclose significant enforcement actions.
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United Bank earns Rs39.3 billion as profit before tax
United Bank Limited (UBL) has announced a strong financial performance for the first nine months of 2021, with a Profit Before Tax (PBT) of Rs39.3 billion, marking a remarkable 49% year-on-year growth. The bank’s earnings per share (EPS) for the same period stood at Rs. 18.6, a substantial increase from Rs. 13.1 in the corresponding period of 2020.
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