Karachi, February 21, 2024 – United Bank Limited (UBL) has reported a staggering 75 percent growth in profit after tax for the calendar year 2023, positioning itself as a leading dividend payer in the banking sector.
The financial results, disclosed to the Pakistan Stock Exchange (PSX), reveal an annual profit after tax of Rs 55.15 billion for the year ending December 31, 2023, compared to Rs 31.51 billion in the previous year.
This outstanding performance translates to an earnings per share (EPS) of Rs 45.05 for the calendar year 2023, a significant increase from the previous year’s Rs 25.76. The Board of Directors, in a meeting held on February 21, 2024, recommended a final cash dividend of Rs 11 per share (110 percent) for the year ended December 31, 2023, in addition to the interim dividend already paid at Rs 33 per share (330 percent).
Analysts at Arif Habib Limited have noted that UBL’s announcement positions it as the leading dividend payer in the banking league. The results for the fourth quarter of calendar year 2023 (4QCY23) reveal a profit after tax of PKR 13.5 billion (EPS: PKR 11.0), showcasing a 3 percent year-on-year increase but a 9 percent quarter-on-quarter decrease.
Key Highlights of the Financial Results:
1. Net Interest Income (NII): The bank reported a net interest income of PKR 37.1 billion during 4QCY23, reflecting a 16 percent year-on-year increase but a 6 percent quarter-on-quarter decline. The total NII for CY23 reached PKR 149 billion, marking a substantial 38 percent year-on-year jump.
2. Non-Funded Income (NFI): Non-funded income witnessed an 18 percent year-on-year decrease during 4QCY23, resulting in a total of PKR 24 billion for CY23, reflecting a 35 percent year-on-year decline. The decline is primarily attributed to an 84 percent year-on-year lower other income, amounting to PKR 1.5 billion. However, Fee and FX income recorded a 15 percent and 48 percent year-on-year increase, respectively.
3. Provisioning Reversals: The bank recorded provisioning reversals of PKR 1.6 billion during 4QCY23, contributing to a total of PKR 11.1 billion for CY23. This is in stark contrast to the whopping provisioning of PKR 17.6 billion recorded in the previous year.
4. Operating Expenses (OPEX): The bank’s operating expenses increased by 20 percent year-on-year in 4QCY23, totaling PKR 20 billion. The Cost/Income ratio stood at 41.4 percent in 4QCY23, compared to 36.8 percent during the same period last year.
5. Effective Tax Rate: The effective tax rate for 4QCY23 was set at 53 percent, compared to 48 percent in the last quarter. The effective tax for CY23 stood at 49 percent, compared to CY22’s 53 percent.
UBL’s robust financial performance reflects its strategic management, adaptability to market dynamics, and the successful implementation of growth strategies. The bank’s impressive dividend payout further strengthens its position as a reliable and rewarding investment for shareholders. As the banking sector continues to navigate challenges, UBL’s resilient performance sets a positive tone for the industry.
