UBL declares strong profits of over Rs30bn, DPS of Rs18

MG News | February 23, 2022 at 03:49 PM GMT+05:00

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February 23, 2022 (MLN): United Bank Limited (UBL) reported profit after tax of Rs30.9 billion (EPS Rs25.2) for the financial year ended 2021, which was 48% higher than 2020.

The Bank maintained strong payouts to shareholders, declaring dividends of Rs18 per share for the year 2021 which was higher than the market consensus, according to a report by Sherman Securities.

The increase in profitability was mainly due to 8x YoY higher capital and 18% YoY increase in fee, commission and brokerage income.

The bank’s net interest income (NII) stood at Rs71.75bn in CY21, lower by 4%YoY. This was due to a 3% YoY decline in interest earned courtesy of asset portfolio repricing at lower yields.

On the other hand, the total non-interest income of the bank posted an impressive growth of 37% YoY to Rs23.4 billion mainly attributable to a higher capital gain of Rs3.75 billion realized on foreign debt securities, up by 8x compared to Rs411.4 million in 2020. The increase in non-markup income was further supported by fee, dividend and FX income which mounted by 18%, 60% and 8% YoY respectively.

The bank also booked a provisioning reversal of Rs955 million during CY21 against a charge of Rs16.8 billion, due to enhanced risk vigilance and strong recovery efforts within both domestic and international businesses.

The bank’s operating expenses were recorded at Rs42.7 billion, growing by 7% YoY. Cost to income ratio remained well controlled at 46% for CY21 compared to 45% last year.

Moreover, the bank’s effective tax rate clocked in at 41% as opposed to 39% last year.

Unconsolidated Profit and Loss Account for the year ended on December 31, 2021 (Rupees '000)
	Dec-21	Dec-20	% Change
Mark-up/return/interest earned	147,974,155	152,003,210	-2.7%
Mark-up/return/interest expensed	76,215,631	77,044,038	-1.1%
Net mark-up/return/interest income	71,758,524	74,959,172	-4.3%
Non-mark-up/interest income
Fee, commission and brokerage income	13,063,973	11,097,472	17.7%
Dividend income	2,033,934	1,269,537	60.2%
Foreign exchange income	3,991,545	3,684,585	8.3%
Income /Loss from derivatives	21,549	(13,076)	-
Gain on sale of securities - net	3,757,530	411,440	813.3%
Other income	510,517	644,381	-20.8%
Total non-mark-up /interest income	23,379,048	17,094,339	36.8%
Total Income	95,137,572	92,053,511	3.4%
Non mark-up/interest expenses
Operating expenses	42,745,343	40,060,602	6.7%
Workers' Welfare Fund	1,021,926	864,956	18.1%
Other charges	198,557	167,335	18.7%
Total non-mark-up/interest expenses	43,965,826	41,092,893	7.0%
Profit before provision	51,171,746	50,960,618	0.4%
Provisions and write offs-net	(955,407)	16,768,148
Profit before taxation from continuing operations	52,127,153	34,192,470	52.5%
Taxation	21,245,030	13,293,687	59.8%
Profit after taxation	30,882,123	20,898,783	47.8%
Earnings per share - basic and diluted (Rupees) for profit from continuing operations attributable to the ordinary equity share	25.23	17.07	47.8%

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