UBL Posts Record Quarterly Earnings of Rs 18.3 Billion in 3Q2024

UBL Posts Record Quarterly Earnings of Rs 18.3 Billion in 3Q2024

Karachi, October 23, 2024 – United Bank Limited (UBL) has announced its highest-ever quarterly earnings, reporting a remarkable profit of Rs18.3 billion for the third quarter of 2024 (3Q2024), translating to an earnings per share (EPS) of Rs14.96. This represents a 24% year-on-year (YoY) and quarter-on-quarter (QoQ) increase, aligning with market expectations.

For the first nine months of 2024 (9M2024), UBL’s earnings have surged to Rs40.12 per share, marking an 18% YoY growth, according to research from Topline Securities Limited. The bank also declared a third interim cash dividend of Rs11 per share, bringing the cumulative dividend for 9M2024 to Rs33 per share.

The significant earnings growth in 3Q2024 was driven by a robust rise in Net Interest Income (NII), which reached Rs52 billion, up 30% YoY and 77% QoQ. This growth was primarily fueled by higher asset yields, favorable asset repricing gaps, and improved returns on Repo borrowings.

Moreover, UBL’s Non-Interest Income surged by an impressive 102% YoY to Rs16 billion in 3Q2024. This was largely attributed to a substantial gain on securities, which clocked in at Rs5.9 billion, compared to just Rs284 million in the same period last year. The bank also experienced strong growth in fees and commissions, which rose by 32% YoY, while foreign exchange income increased by 49% YoY.

In its unconsolidated accounts, UBL recorded a gain of Rs7.3 billion, primarily due to the sale of its subsidiary, United National Bank Limited (UNBL UK). However, the bank recorded a provision expense of Rs894 million in 3Q2024, a reversal from the provision income of Rs664 million in 2Q2024 and a slight reduction from Rs993 million in 3Q2023.

Operating expenses increased by 26% YoY and 18% QoQ, driven by inflationary pressures and UBL’s expanding branch network. Despite this, the bank’s cost-to-income ratio improved significantly, falling to 35% in 3Q2024, compared to 40% in 3Q2023 and 42% in the previous quarter.

UBL’s effective tax rate reached 57% in 3Q2024 and 52% for 9M2024. This higher tax rate is partially due to additional taxes imposed as a result of the bank’s low Advances-to-Deposits Ratio (ADR), which stood at 25.2% as of June 2024—the lowest in the sector.

With these strong financial results, UBL continues to demonstrate its resilience and growth potential in a challenging economic environment.