UBL targets sustained growth with branch, digital and Islamic banking expansion

October 07, 2026 (MLN): Continued investment in branch outreach, digital capabilities and people is set to anchor United Bank Limited's (PSX: UBL) growth momentum through 2026 and beyond, after a first half in which every operating area stayed on a growth trajectory, with solid profit growth and a consistent return on equity (ROE).

The bank is building outreach and capacity across both its conventional and Islamic networks, which is showed in its strong deposit market share, according to transmission report of UBL.

The domestic network expanded to 2,083 branches by end-June 2026 from 2,009 at end-2025. Islamic banking branches rose to 788 from 752, and Islamic banking windows climbed to 738 from 596. Overseas branches increased to 9 from 8.

A sharper focus on trade and remittance business has kept all fee income lines resilient and supported revenue growth. Card-related fees, trade income, corporate service and investment banking fees all contributed, while the bank maintained its leadership in the domestic home remittances space.

Rising interest rates are expected to shift the banking sector's earnings in the coming year, with global policy tightening now under way. The State Bank of Pakistan's policy rate stands at 11.50%. The US Federal Reserve raised its benchmark rate by 25 basis points to 4% from 3.75%, its first hike since July 2023.  The Bank of Japan has raised its rate to around 1.25%, the highest in 31 years, and the Reserve Bank of India raised its repo rate by 25 basis points to 5.50% today.

Digital excellence remains a priority. Strategic spending on technology, cybersecurity and process automation is expected to improve customer experience and operational efficiency. The push is already visible in the cost base: IT expenses rose 40% year on year to Rs6.8bn in the first half, and capital work-in-progress climbed to Rs32.7bn from Rs9.5bn at end-2025.

Staff costs rose 40% to Rs32.2bn, showing continued investment in talent development and leadership, which the bank credits with sustaining its growth and profitability momentum. Property-related expenses grew 51% to Rs10.9bn as the network expanded.

The Islamic franchise is gaining weight in the overall mix. Islamic banking deposits stood at Rs1.35tr, up from Rs962.3bn at end-2025, and the segment's profit after tax rose to Rs14.0bn from Rs1.7bn a year earlier.

Capital and ratings provide a cushion for this expansion. The consolidated capital adequacy ratio (CAR) stood at 19.43% at end-June 2026, against 20.97% at end-2025, leaving a buffer of 6.43 percentage points above the 13.0% minimum requirement.

The common equity tier-1 ratio was 15.97% and the total tier-1 ratio 16.33%. VIS Credit Rating Company re-affirmed UBL's entity ratings at 'AAA/A-1+' and its additional tier-1 TFC at 'AA+', both with a 'Stable' outlook.

With its emphasis on customer service and innovation, the bank remains committed to delivering strong performance and solid returns to stakeholders in 2026 and beyond.

Financial performance

UBL led the sector in revenue generation, contributing 24% of total turnover with interest earned of Rs665.0bn, followed by National Bank of Pakistan (PSX: NBP) and Habib Bank Limited (PSX: HBL) with 13% each (Rs361.7bn and Rs348.5bn respectively). The bank also topped sector earnings with a 26% share (Rs85.0bn), ahead of Meezan Bank (PSX: MEBL) at 15% (Rs48.9bn) and HBL at 10% (Rs33.5bn).

On a standalone basis, profit before tax for the six months ended June 30, 2026 rose 19% year on year to Rs177.4bn, while profit after tax reached Rs85.0bn against Rs63.8bn a year earlier. Earnings per share rose to Rs33.93 from Rs25.69. Consolidated profit after tax was Rs85.9bn (H1'25: Rs64.7bn), with consolidated EPS of Rs34.30 (H1'25: Rs26.07).

Gross revenue grew 26% to Rs260.8bn, with net mark-up income at Rs189.7bn and non-markup income at Rs71.1bn. Capital gains of Rs42.4bn were booked as the bank took advantage of opportunities arising from the Middle East conflict.

Operating expenses rose 44% to Rs84.1bn, while a net provision reversal of Rs4.2bn was recorded against Rs3.9bn a year earlier. An interim cash dividend of Rs8 per share was also declared.

 Source: UBL Half Yearly Report, June 2026

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