UBL Posts Half-Year Profit of Rs. 30.8 Billion

United Bank Limited (UBL) Wednesday announced a consolidated profit after (PAT) tax of Rs. 30.8 billion for the half year ended 30 June 2024 (1HCY24). UBL announced earnings for 2QCY24 at Rs. 14.8 billion (EPS: Rs. 12.1), depicting an uptick of 17 percent YoY while down by 7 percent quarter-on-quarter (QoQ). For 1HCY24, total earnings stood at Rs. 30.8 billion, a 14 percent YoY increase. The rise in earnings on YoY basis is fueled by a jump in total income and provisioning reversals. The bank also announced a cash dividend of Rs. 11 per share along with the result taking total payout for 1HCY24 to Rs. 22 per share. The bank’s NII stood at Rs. 29.2 billion for the 2QCY24, reflecting a YoY decline of 22 percent. However, on a QoQ basis, NII saw a modest increase of 4 percent. The bank experienced a significant increase in the interest expense, which surged by 283 percent YoY and by 17 percent QoQ. Moreover, the interest income also experienced substantial growth, rising by 173 percent YoY and by 16 percent QoQ. The bank’s Non-Funded Income (NFI) surged by 157 percent YoY during 2QCY24, bringing the total for the 1HCY24 to Rs. 40.6 billion, a 142 percent YoY increase. This significant rise is primarily attributed to a gain on the sale of securities amounting to Rs. 16.6 billion, compared to a loss of Rs. 637 million in the same period last year. Additionally, fee and commission income increased by 19 percent YoY to Rs. 11.5 billion in 1HCY24. However, foreign exchange income declined by 8 percent YoY, amounting to Rs. 6.5 billion during 1HCY24. A provisioning reversal was recorded in the outgoing quarter, settling at Rs. 644 million, this took the provisioning reversal for the 1HCY24 to Rs. 2,362 million compared to a provisioning charge during 1HCY23 of Rs. 3 billion. The bank’s OPEX increased by 19 percent YoY in 1HCY24 clocking-in at Rs. 40.2 billion (2QCY23: Rs. 20.4 billion. With this, Cost/Income stood at 42 percent in 2QCY24 against 38.9 percent in same period of last year. Effective tax rate was set at 47.5 percent during 2QCY24 compared to 51.5 percent the same period of the previous year. With input from Arif Habib Limited’s Result Review