2018 was a tough year for United Bank Limited (UBL) after the bank’s profits sank by Rs. 10.9 billion due to low-interest income and unusual charges under pension liability and loan write-offs.
According to the financial statement, the profit of the bank reduced to Rs. 15.2 billion in 2018, down from Rs. 25.95 billion reported in 2017, showing a decline of 42 percent.
The decline in the profitability of the bank is not the only concern for its shareholders and investors but for the overall banking industry as the share of Pakistan’s second-biggest bank is significant in the overall financial sector.
The steep dip in profitability is the second bad news for its shareholders and customers after UBL had to shut down its branch in New York.
The share value of the UBL Bank’s also reduced from 21.20 to 12.65.
Despite a consistent increase in policy rates, the interest income of the bank marginally increased from Rs. 58 billion to Rs. 58.2 billion. The non-interest income surged to Rs. 26.5 billion from Rs. 24.2 billion. Expenses of the bank surged to Rs. 40.4 billion from Rs.39.3 billion.
The bank announced a dividend of Rs. 3 per share to its shareholders in addition to Rs. 8 per share that had already been paid.