United Bank Limited (PSX: UBL) Friday announced its 2Q2025 financial results, reporting consolidated earnings of Rs. 29 billion (Diluted EPS: Rs. 11.4), up 93 percent year-over-year (YoY) but down 21 percent on a quarter-over-quarter (QoQ) basis.
The result took 1H2025 earnings to Rs. 65 billion (Diluted EPS: Rs. 25.8), up 110 percent over the same period of the previous year.
Brokerage House Topline Securities said the 2Q2025 results came below industry expectations due to (1) higher-than-expected non-interest expenses and (2) higher tax expense.
UBL’s non-interest expenses jumped significantly by 76 percent YoY and 34 percent QoQ to Rs. 36 billion in 2Q2025. The broker firm said according to its channel checks, this increase is driven by the bank’s growth strategy, with most of the spending incurred on branch expansion and digital initiatives aimed at capturing deposit growth. UBL recorded total deposit growth of 32 percent YoY and 26 percent QoQ during 2Q2025.
Effective tax rate also came in higher at 61 percent in 2Q2025, compared to 53 percent in 1Q2025. According to our channel checks, UBL incurred some prior year tax charges during the quarter.
Net Interest Income (NII) for 2Q2025 settled at Rs. 91 billion up 8 percent QoQ and 213 percent YoY. This uptick was primarily driven by increase in current account deposits, and higher yield on investments, coupled with robust loan growth across all segments of the bank’s well-timed deployment.
Fee income remained declined by 16 percent YoY and 4 percent QoQ, primarily due to a sharp drop in gains on derivatives and financial assets, which fell by 75 percent YoY and 60 percent QoQ to Rs. 2.3 billion in 2Q2025. However, UBL’s fee and commission income remained strong, clocking in at Rs. 8.9 billion, up 16 percent YoY and 20 percent QoQ.
UBL recorded a provision reversal of Rs. 2.3 billion in 2Q2025, compared to a reversal of Rs. 0.6 billion in 2Q2024 and Rs. 1.6 billion in 1Q2025.
As part of its results announcement, UBL also announced a dividend of Rs.8 per share, in line with our expectations, which takes the total 1H2025 DPS to Rs. 13.5 per share.