Karachi May 6 2022: United Bank Limited (UBL) domestic CASA to total deposits ratio was measured at 89.1% at Mar’22, improving from 88.2% at Dec’21, while the current to total deposits ratio improved from 47.4% at Dec’21 to 49.3% at Mar’22.
Current account amounts to ~Rs. 800 billion out of total deposits of Rs. 1.5 trillion at Mar’22.
UBL International’s deposits base stood at USD 1.4 billion, growing by 5% since Dec’21.
UBL’s balance sheet stood at Rs. 2.3 trillion at Mar’22 (Dec’21: Rs. 2.6 trillion). Bank level deposits stood at Rs. 1.77 trillion at Mar’22, and largely remained in line with Dec’21. The domestic deposits portfolio stood at Rs. 1.5 trillion, slightly ahead of Dec’21 levels. Current deposits were recorded at Rs. 749 billion, growing by 4% over Dec’21, while savings deposits were recorded at Rs. 606 billion, largely in line with Dec’21.
Bank level net advances closed at Rs. 656 billion as at Mar’22 (Dec’21: Rs. 646 billion). The Bank aims to ensure efficient allocation of capital as well as maximizing overall relationship yield. The domestic performing advances portfolio closed at Rs. 509 billion, largely in line with Dec’21 levels. The Corporate loan book stood at Rs. 391 billion, growing by 11% since Dec’21. The Bank continues to build its Islamic lending book, which recorded a strong increase of 52% since Dec’21, closing at Rs. 67 billion. Within International, the advances portfolio grew by 10% over Dec’21, recorded at USD 778 million as at Mar’22.
Bank level net investments stood at Rs. 1.2 trillion at Mar’22 (Dec’21: Rs. 1.5 trillion). Funding is primarily deployed in government securities, with Rs. 334 billion invested in Fixed Income PIBs, Rs. 481 billion invested in Floating Rate PIBs and Rs. 185 billion in Treasury Bills. In the current interest rate environment, the investment strategy is working well as we ride the yield curve across different tenors. UBL International’s net investments stood at USD 622 million, largely in line with Dec’21 levels.
UBL recorded Profit After Tax (PAT) of Rs. 9.5 billion for Q1’22 as against a PAT of Rs. 7.4 billion for Q1’21, a strong growth of 29% year on year. Earnings per share (EPS) was measured at Rs. 7.78 versus Rs. 6.05 in Q1’21. On a consolidated basis, UBL recorded a PAT of Rs. 9.4 billion (Q1’21: Rs. 7.6 billion). The consolidated EPS was recorded at Rs. 7.60 for Q1’22 (Q1’21: Rs. 6.21).
UBL is reinvesting in its branch network with relocation to more commercially viable locations, renovation of branches and improving service levels. We are also improving the compensation structure for our field and head office teams, with better remuneration to reward the efforts of a well-trained and motivated workforce that has delivered strong results.
The Bank’s operating expenses were recorded at Rs. 11.7 billion for Q1’22, up 19%. Employee compensation expense was recorded at Rs. 4.6 billion for Q1’22, with an increase of 11% versus Q1’21. Property expenses were recorded at Rs. 1.9 billion for Q1’22, up 19% which includes a one-off adjustment of change in accounting estimate for depreciation on premises. IT expenses were recorded at Rs. 1.2 billion, with an increase of 20% primarily due to the steep devaluation in the PKR impacting foreign currency denominated licensing arrangements. Other variable expenses were recorded at Rs. 4.0 billion (Q1’21: Rs. 3.1 billion), the increase being in line with the increased business volumes versus last year.
