United Bank Limited (PSX: UBL) has reported a profit after tax of Rs. 42 billion for nine months ended 30 September 2023, up by 126 percent compared to the same period last year.
According to Arif Habib Limited, this is UBL’s highest-ever profit for a nine-month period. This outstanding performance was primarily fueled by higher net interest income and provisioning reversals.
UBL's highest-ever profitability & payout
UBL paid out a historic dividend of PKR 33/share and recorded remarkable profitability (PAT) of PKR 42bn in 9MCY23. This outstanding performance was primarily fueled by higher net interest income and provisioning reversals. Furthermore,… pic.twitter.com/j6yA4WuP4H
— Arif Habib Limited (@ArifHabibLtd) October 25, 2023
Along with the result, the bank announced an interim cash dividend of Rs. 11 per share, which is in addition to the interim dividend paid at Rs. 22 per share. The bank’s unprecedented dividend payout in 9MCY23 solidified its position as the leader in dividend payments within the banking sector.
The bank’s interest income surged to Rs. 111.8 billion during 9MCY23 compared to Rs. 75.9 billion in SPLY.
Interest earned by the bank settled at Rs. 151 billion during 3QCY23, increasing 100 percent YoY and 46 percent QoQ while interest expense was up by 140 percent YoY | 69 percent QoQ. With this, Net Interest Income of the bank clocked in at Rs. 40 billion, up 37 percent YoY and 6 percent QoQ.
The total non-markup income decreased to Rs. 13.1 billion during the period as compared to Rs. 23.8 billion reported in SPLY.
Non-markup income for the quarter recorded a loss of Rs. 21 million vis-a-vis a gain of Rs. 8.2 billion in 3QCY22. Consequently, the cumulative non-interest income for 9MCY23 amounted to Rs. 13.1 billion, depicting a decline of 45 percent YoY when compared to Rs. 23.8 billion in the SPLY. The primary reason behind this decline in NFI during the 9MCY23 was the loss on sale of securities of Rs. 12.8 billion vs. a gain on securities of Rs. 757 million in SPLY.
During 3QCY23, the bank recorded a provisioning reversal of Rs. 9.1 billion in contrast to a charge of Rs. 5.5 billion reported in 3QCY22. With this, the total provisioning reversal clocked in at Rs. 9.5 billion during 9MCY23 (9MCY22: provisioning charge of Rs. 6.8 billion).
Operating expenses grew to offset its profitability standing at Rs. 51 billion, up by 26 percent from Rs. 40 billion in 9MCY22.
The bank paid Rs. 38.5 billion in taxes in 9MCY23 compared to Rs. 32 billion reported in SPLY.
UBL’s earnings per share (EPS) for profit from continuing operations (attributable to shareholders of the company) clocked in at Rs. 34.05 compared to Rs. 15.05 in 9MCY22.
At the time of filing, the bank’s scrip at the bourse was Rs. 157.9, up 0.06 percent or Rs. 0.1 with a turnover of 4,970,819 shares on Wednesday.
