UBL declares Rs7.6 billion profit for second quarter

UBL declares Rs7.6 billion profit for second quarter

KARACHI: United Bank Limited (UBL) on Monday announced financial results for second quarter ended June 30, 2021 and announced Rs7.6 billion for the period.

UBL announced its 2QCY21 result today and posted a profit after tax of PKR 7.6 billion for 2QCY21 translating to an EPS of PKR 6.2, up by 25 per cent YoY.

The result is above our estimates and street consensus which was Rs5.3 per share and PKR 5.1 share, respectively.

The deviation is mainly on account of better than expected NIMs at 3.6 per cent and recognition of provisioning reversal worth PKR 441 million during the quarter.

Consequently, the stock has reacted positively (+2.23 per cent) post announcement of result. The result was accompanied with an interim cash dividend of Rs4.0 per share.

According to analysis of KASB:

UBL’s profitability increased 25 per cent YoY during 2QCY21 attributed to i) provisioning reversal and ii) higher NFI. Sequentially, reversal in provisioning expense offset the decline in NIMs by 350bps that translated into flattish earnings on QoQ basis.

NFI increased by 17 per cent YoY in 2QCY21 on account of 37 per cent YoY jump in fee income that lent support to the bottom-line.

The bank recorded higher effective tax rate of 45 per cent which we believe is attributed to new taxation measures in Budget FY22.

Additionally, C/I improved to 44 per cent as opposed to 52 per cent in corresponding period last year that improved UBL’s profitability.