Karachi, October 25, 2023 – United Bank Limited (UBL), one of Pakistan’s leading financial institutions, has reported a staggering 126 percent year-on-year (YoY) profit growth in the third quarter of 2023, ending on September 30.
The bank’s exceptional performance has garnered the attention of financial experts and investors alike.
According to the analysis conducted by experts at Arif Habib Limited, UBL announced a profit of PKR 14.7 billion (EPS: PKR 12.04) for the third quarter of 2023, marking a remarkable 126% YoY growth and a significant 16% quarter-on-quarter (QoQ) increase. This impressive performance was attributed to various factors, including substantial provisioning reversals, which had a positive impact on the bank’s overall profitability.
Interest earned by UBL during the third quarter of 2023 amounted to PKR 151 billion, marking a substantial 100% YoY increase and a significant 46% QoQ growth. However, the interest expense also increased by 140% YoY and 69% QoQ. Consequently, the Net Interest Income of the bank reached PKR 40 billion, showcasing a remarkable 37% YoY growth and a 6% QoQ increase. For the first nine months of the year, UBL’s Net Interest Income stood at PKR 112 billion, reflecting a robust 47% YoY growth.
Non-interest income for the quarter, however, recorded a loss of PKR 21 million, in stark contrast to a gain of PKR 8.2 billion in the same period last year. This resulted in a cumulative non-interest income for the first nine months of 2023, which amounted to PKR 13.1 billion, showcasing a significant 45% YoY decline when compared to the same period in the previous year. The primary reason for this decline was the loss incurred on the sale of securities, amounting to PKR 12.8 billion, as opposed to a gain of PKR 757 million in the previous year.
During the third quarter of 2023, UBL reported a provisioning reversal of PKR 9.1 billion, a substantial contrast to the PKR 5.5 billion provisioning charge reported in the same period in 2022. This contributed to a total provisioning reversal of PKR 9.5 billion during the first nine months of 2023, as compared to a provisioning charge of PKR 6.8 billion in the previous year.
UBL’s operating expenses (OPEX) increased by 29% YoY and 11% QoQ during the third quarter of 2023, reaching PKR 19.1 billion. Consequently, the Cost/Income ratio stood at 48.4% for the quarter, a notable increase compared to the 39.8% recorded during the same period last year. On the other hand, the effective tax rate during the third quarter of 2023 was 48.3%, showing an improvement from 59.3% in the previous year.
In a move that pleased its shareholders, UBL also announced a dividend of PKR 11 per share for the quarter, resulting in an industry-high payout of PKR 33 per share for the first nine months of 2023. The bank’s remarkable performance in the third quarter underscores its strong position in the financial sector and bodes well for its future prospects.
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