UBL Profits Grow by 50% in H1 2019

United Bank Limited (UBL) performed exceptionally in the local banking industry, posting profit growth of 50% in the first half of 2019 compared with a similar period of 2018.

According to their financial statement, UBL recorded a Profit After Tax of Rs. 9.5 billion in the first half of 2019 compared to Rs. 6.3 billion in the first half of 2018.

The Net Markup Income got a 7% year on year increase to close at Rs. 29.9 billion during H1 2019.

The bank continued to focus on new-to-bank (NTB) customer relationships, particularly in current deposits, as 219,000 NTB current accounts were added in H1 2019. UBL’s domestic deposits market share ended at 8.04% in June 2019. Its overall advances averaged at Rs. 630 billion, similar to the previous year’s level.

The non-markup income, constituting 29% of gross revenue, stood at Rs. 12.1 billion in H1 2019 against Rs. 14.3 billion last year. Non-Markup Income closed 15% lower compared to H1 2018 on account of capital gains on fixed income securities of Rs. 4.1 billion realized last year.

Fees and Commissions grew by 5% over the previous year to Rs. 7.1 billion in H1 2019 with strong growth across branch banking customer fees, bancassurance, home remittances, and UBL Omni.

Administrative expenses remained well-managed as they grew by 4% compared to the previous year to close at Rs. 19.2 billion during H1 2019.

The board of directors of UBL declared an interim dividend of 25% (Rs. 2.5 per share) in their meeting in Islamabad held on August 7, 2019, along with the results for the half-year that ended June 30, 2019. Earnings per share (EPS) stood at Rs. 7.80 as compared to Rs. 5.12 the previous year.

The bank seeks to maintain strong capitalization levels to provide a solid platform for future business growth. During the current year, the bank completed the issuance of its Additional Tier-1 TFCs, with a total issue size of Rs. 10 billion. This is the largest publicly traded instrument of its kind to date.

UBL has been designated as a Domestic Systemically Important Bank (D-SIB) by the SBP. As a result, the bank is required to hold an additional 1.5% Higher Loss Absorbency (HLA) surcharge above its minimum CAR limit in 2019. This has enhanced the overall CAR limit from 11.9% to 13.4% for June 2019.