U Microfinance Bank Records 111% Profit Growth in 2018

U Microfinance Bank has become sustainable enough to run its operation profitably as it recorded a handsome profit growth of 111% in 2018 as compared to 2017.

According to the financial statement, the microfinance bank recorded a profit of Rs. 543 million in 2018 against Rs. 257 million profit reported in 2017.

This is the third straight year the bank has made a profit. In 2016, it made a profit of Rs. 72 million for the first time since its inception in 2012. In 2017, the bank also made a profit of Rs. 257 million with 353% growth from 2016.

The bank generated its revenue from its interest income which grew by 65 percent from the previous year to stand at Rs. 4.36 billion in 2018. The non-interest income grew by 39 percent year-on-year to reach Rs. 625 million in 2018.

The management of the microfinance bank supported by its parent company, PTCL, has chalked out aggressive expansion plans for 2019. It decided to set up 60 more branches and 10 service centers this year, which is a highly ambitious target even for a profitable commercial bank. The expansion program will increase the penetration of the bank from 100 cities to 200 as per plan.

The expansion of the branch network will give impetus to the penetration of the bank with access points to customers in different new cities.

Last year, the parent company injected an amount of Rs. 1 billion for meeting the capital requirement of the bank. It also planned to inject a whopping amount of Rs. 4 billion in the microfinance bank for the future expansion of operations in business and network.

At present, Ubank has a network of 141 touch points, across 100 cities and rural areas in Pakistan, offering a wide range of microfinance loans, deposit products, and branchless banking solutions. Ubank offers branchless banking services under the banner of ‘U Paisa’ in collaboration with Ufone.

The service is offered at nearly 45,000 agent locations across the country. Currently, Ubank serves more than 850,000 customers, where 22% of the served customers are women. The number of Ubank’s employees also grew by 50% during the year, where 9% of the total workforce comprises of women.