Karachi October 24 2022: United Bank Limited earned foreign exchange income of Rs. 7.6 billion for 9M’22 as against Rs. 2.6 billion last year, primarily due to enhanced customer flows and proactive balance sheet positioning, according to the information shared by the bank.
“We have received notice from State Bank of Pakistan on higher profitability earned through foreign exchange income and we are fully cooperating with the authorities on this” says Mr. Shahzad G. Dada President & CEO of the Bank while speaking on Friday.
UBL recorded Profit Before Tax (PBT) of Rs. 50.7 billion for the nine months ended September 30, 2022, with a strong growth of 29% year on year.2
“In these challenging times, we shall continue to play our role in strengthening and building on the strong potential of the Pakistan banking sector, driven by the unwavering commitment of the UBL staff” says Mr. Shahzad G. Dada President & CEO of the Bank.
On a standalone basis, UBL recorded Profit After Tax (PAT) of Rs. 18.8 billion for 9M’22 as against a PAT of Rs. 22.8 billion for 9M’21. Earnings per share (EPS) was measured at Rs. 15.33 for 9M’22 (9M’21: Rs. 18.59).
On a consolidated basis, UBL recorded PAT of Rs. 18.8 billion (9M’21: Rs. 21.9 billion). The consolidated EPS was measured at Rs. 15.09 for 9M’22 (9M’21: Rs. 17.76).
The Bank’s gross revenues were recorded at Rs. 94.9 billion for 9M’22, an increase of 34% against the corresponding period of last year. Net mark-up income stood at Rs. 72.8 billion for 9M’22, with a significant increase of 36% year on year as a result of a well-positioned investment book and efficient cost of deposits. Non-markup income stood at Rs. 22.1 billion for 9M’22 which is up 28%, owing to strong growth across all major fee-based revenues.
The Bank’s operating expenses stood at Rs. 37.8 billion for 9M’22, and are up 21% year on year, as a result of significantly higher inflation levels, steep decline in the value of PKR and higher overheads across the network. Despite the increase in the expense base, the cost to income ratio continues to improve and is down to 39.8% for 9M’22 as compared to 44.0% last year.
The Bank recorded a net provisioning expense of Rs. 5.4 billion for 9M’22 (9M’21: net provision reversal of Rs. 415 million), mainly to build coverage against the foreign currency denominated investments held within UBL International.
Domestic deposits averaged Rs. 1.60 trillion in 9M’22, growing by 7% over last year with a net incremental increase of Rs. 100 billion. The Bank added approximately 450,000 new current account relationships in 9M’22 as against 413,000 current account relationships in the corresponding period of last year.
Bank level performing advances averaged Rs. 647 billion for 9M’22, growing by 19%. Domestic performing advances averaged Rs. 505 billion for 9M’22, with an increase of 15%, mainly due to strong build up across the Corporate, SME and Agri segments. The Bank continued its build up in business scale across the Islamic banking space as the segment loan book averaged Rs. 62 billion for 9M’22, growing by 81%.
The Bank’s markup earning investments averaged Rs. 1.46 trillion for 9M’22, growing by 7%. The domestic government securities portfolio earned a healthy yield of close to 12.0% during the period under review. UBL International also maintained a healthy contribution to the Bank’s overall netmarkup income with yields of 5.7% earned on the investment portfolio, comprising primarily of foreign sovereign debt instruments.
The Bank earned non-markup income of Rs. 22.1 billion in 9M’22, with a notable increase of 28%. Non-markup income contributed 23% to the total revenues of the Bank (9M’21: 24%).
Fees and commission income of Rs. 11.7 billion was earned in 9M’22, recording a strong growth of 20%. Customer fees from branch banking operations stood at Rs. 1.8 billion for 9M’22, an increase of 44%, driven mainly by business acquisitions across all regions. UBL maintained its leadership position in the domestic home remittances space with a market share of over 21%. As a result, commission income of Rs. 1.5 billion was earned in 9M’22, with a robust growth of 17%. Bancassurance business maintained its significant contribution to the non-markup revenue base with commissions of Rs. 1.2 billion earned during the period, in line with last year.
Income from debit and credit card fees of Rs. 2.3 billion was earned in 9M’22, which is up 27% as the portfolio of active customers has built up well during the year. Commission income from cash management was recorded at Rs. 828 million for 9M’22, growing by 16% year on year with higher throughput volumes across corporate and SME customers. Income from trade and guarantee business was recorded at Rs. 1.3 billion, recording a strong growth of 37% with steady volumes across long standing customer relationships.
The Bank earned foreign exchange income of Rs. 7.6 billion for 9M’22 as against Rs. 2.6 billion last year, primarily due to enhanced customer flows and proactive balance sheet positioning. Dividend income of Rs. 1.5 billion was earned in 9M’22, with an increase of 4%, with strong payouts from the Bank’s holdings in fertilizer and energy sectors as well as group entities.
UBL recorded a net provision charge of Rs. 5.4 billion for 9M’22 as against a net provision reversal of Rs. 415 million in the corresponding period last year
The Bank is continually striving to optimize its cost base, through continued investments in its staff as well as the physical and IT / digital infrastructures to support the needs of a large-scale network and better serve our customers
The Bank seeks to maintain a strong capital base that provides a solid foundation for future growth as well as maintaining adequate buffers over regulatory requirements
