UBL’s Profits Fall Amidst Increased Operating Costs

Financial results submitted to the Pakistan Stock Exchange (PSX) on Thursday show that UBL’s profit for the third quarter (July-Sep 2017) stood at Rs. 5.85 billion, down 16.43% compared with the last quarter. This is mainly on account of higher operating costs and charge of provision expense during the Q3.

United Bank Limited (UBL) posted earnings of Rs. 19 billion in 9 months from January-Sep 2017, down 10.38% from a year ago. UBL also announced an interim cash dividend of Rs. 3 per share, which is in addition to Rs. 6 per share dividend which is already paid.

United Bank Ltd’s total net mark-up income for the period decreased to 2.17%, amounting to a total of 13.66 billion Rupees during the quarter that ended September, 30th 2017.

Non-interest expense of UBL was up by 17%. UBL also booked provisioning expense of Rs. 633 million versus provision reversal Rs. 278 million. This is likely due to provisions against the bank’s international book.

Earnings per share for three months was decreased to Rs 4.78 as compared to Rs. 5.73 during the last period and for the nine months, earning per share decreased to Rs. 15.60.

At the time of filing this report, UBL’s script is currently trading at Rs. 190.45 down by 1.23% at the bourse with a turnover of 378,200 shares.

Net Interest income (NII) of UBL improved by 4% YoY to Rs. 14.6 billion in Q3 2017 despite fears of possible margin contraction post maturity of Pakistan Investment Bonds. NII remained flat on QoQ basis.

The net interest income of the bank was up by 3.51% as compared to quarter period of the previous year. For the nine months the interest income of the bank was just flat.

Non-interest income was also up by 3% to Rs. 4.7 billion as fee. Capital gain on the other hand was down 41%.

The results were below expectations as reported by Topline securities.

United Bank Limited (UBL) is one of Pakistan’s largest banks in the private sector. The bank operates a network of over 1,375 branches across Pakistan and 19 branches overseas. It was declared Pakistan’s Best Bank 2016 at the first Pakistan Banking Awards and the bank’s entity ratings were also recently upgraded to AAA/A-1+.