UBL fails to lift profits during 9MCY20 owing to fall in non-interest income

MG News | October 26, 2020 at 11:49 AM GMT+05:00

0:00

October 26, 2020 (MLN): United Bank Limited (UBL) has made profits of Rs. 15.4 billion for the nine months ended September 30, 2020, i.e. merely 2% lower as compared to the profits of the same period last year (SPLY).

The earnings per share for the period stood at Rs. 12.81, showing almost no change as compared to the EPS of Rs. 12.82 reported in SPLY.

Despite an increase of 29% in net interest income, the profits of the Bank took a hit on account of a 25% drop in non-interest income. The fall in the latter resulted from a decline in Fee income, Dividend income, forex income, income from derivatives, and Other income by 24%, 35%, 12%, 4.22x, and 61% respectively.

While the operating expenses did not show any change as such, the non-core charges jumped by 53.44x, taking a significant toll on the operating margins.

Other items such as decline in share of profits from associates by 59% and an increase in provisions by 171% further pulled the profits down.

Consolidated Financial Results for nine months ended September 30, 2020 (Rupees'000)
	Sep-20	Sep-19	% Change
Mark-up / return / interest earned	123,933,330	114,622,747	8%
Mark-up / return / interest expensed	(64,208,325)	(68,165,602)	-6%
Net mark-up / interest income	59,725,005	46,457,145	29%
NON-MARK-UP / INTEREST INCOME
Fee and commission income	9,105,995	12,054,092	-24%
Dividend income	508,512	784,488	-35%
Foreign exchange income	3,051,817	3,484,894	-12%
Income / (loss) from derivatives	(162,204)	50,298	-422%
Gain / (loss) on securities - net	981,510	772,386	27%
Other income	733,898	1,874,038	-61%
Total non-markup / interest income	14,219,528	19,020,196	-25%
Total income	73,944,533	65,477,341	13%
NON-MARK-UP / INTEREST EXPENSES
Operating expenses	(31,760,011)	(31,811,389)	0%
Workers welfare fund	(706,298)	(532,237)	33%
Other charges	(160,328)	(2,945)	5344%
Total non-markup / interest expenses	(32,626,637)	(32,346,571)	1%
Share of profit of associates	174,924	427,840	-59%
Profit before provisions	41,492,820	33,558,610	24%
Provisions and write offs - net	(15,453,220)	(5,706,877)	171%
Extraordinary / unusual items
PROFIT BEFORE TAXATION	26,039,600	27,851,733	-7%
Taxation	(10,646,054)	(12,163,304)	-12%
PROFIT AFTER TAXATION	15,393,546	15,688,429	-2%
Earnings per share	12.81	12.82	0%

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