United Bank Limited (UBL) notified 1st Quarter CY2021 financial results today where the bank posted Net Profit of PKR7.6bn (EPS: PKR6.20) compared to PKR4.9bn (EPS: PKR3.98) in the same period last year.

Surprisingly UBL announced quarterly dividend of PKR4.0/share. The Profit was above analyst expectation as Bank booked lower provisioning expense (PKR376mn in 1QCY21 vs. PKR2.2bn in 4QCY20). This is probably because the Bad Loans in its Foreign Loan book is almost fully provided.

Net Interest Income (NII) declined by 3% on a YoY basis which we opine is due to greater exposure of the bank to short term federal government securities while on a QoQ basis, NII increased by a marginal 1%.

Above expected non funded income triggered the surge in earnings having shot up by a sizable 26/40% YoY/QoQ respectively. The NFI surge emanated from hefty capital gains which clocked in at PKR 1.9Bn against gains of PKR 264Mn in the same quarter last year.

Besides, enhanced NFI and signficant decline in provisioning expense, Higher Net Profit accretion is also credited to controlled admin expenses which declined by 8% QoQ to PKR 10.1Bn.

(Rupees in ‘000)January  –
March 2021
January  –
March 2020
Mark-up / return / interest earned32,930,55044,374,183
Mark-up / return / interest expensed15,425,64426,584,742
Net mark-up / interest income17,504,90617,789,441
Fee and commission income3,469,3343,510,113
Dividend income252,206177,699
Foreign exchange income524,508770,976
Income / (loss) from derivatives7,254(11,274)
Gain on securities – net1,874,07458,052
Other income127,885174,599
Total non mark-up / interest income6,255,2595,080,165
Total income23,760,16522,869,606
Non mark-up / interest expenses  
Operating expenses 10,784,63310,314,814
Workers’ Welfare Fund248,494219,422
Other charges24,547181,039
Total non mark-up / interest expenses11,057,67410,715,275
Share of profit / (loss) of associates152,002(147,536)
Profit before provisions12,854,49312,006,795
Provisions and write-offs – net376,3323,701,317
Profit before taxation from continuing operations12,478,1618,305,478
Profit after taxation from continuing operations7,585,9344,905,158
Discontinued operation
(Loss) / profit from discontinued operation – net of tax(33)6,505
Profit after taxation 7,585,9014,911,663
Earnings Per Share6.213.98
Dividend Per Share42.5


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