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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