UBL: Profits jump 9% YoY despite hefty provisioning

February 25, 2021 (MLN): United Bank Limited (UBL) has unveiled its financial performance for the CY20, wherein the bank witnessed 9% YoY growth in consolidated profits to Rs 20.79 billion from Rs 19 billion earned in the previous year.

In conjunction with the results, the Bank has also announced a final cash payout of Rs 9.50/sh, taking a full-year payout to Rs 12.00/sh.

The earnings per share of the Bank clocked in at Rs 17.1/sh compared to Rs 15.6/sh in CY19.

Despite a marginal fall in Markup income, the Bank’s Net Interest Income (NII) surged by 21.7% YoY due to 16% YoY decline markup expenses.

However, the Non-markup Income (NMI) of the Bank weakened by 20% YoY primarily due to a significant fall in fee income, FX income, and dividend income by 18.4%, 17.4%, and 18.4% YoY respectively during CY20.

The growth in UBL’s profitability further restricted by higher provision expenses as the bank has booked provisioning expense of Rs 17.2 billion which is 2.3x higher than the provisioning cost of CY19. 

On the cost front, Bank’s operating expenses remained flat, as a result of which UBL’s cost to income ratio improved to 47% from 51% in CY19.

The effective tax rate of the bank came in at 39% in CY20 compared to 43% in the comparative year.

Overall, in CY20 despite hefty provisioning, the bank managed to lift its earnings mainly on the back of higher NII and flat operating expenses.

 

Consolidated Profit and Loss Account for the year ended on December 31, 2020 (Rupees '000)

 

Dec-20

Dec-19

% Change

Mark-up/return/interest earned

                  156,078,787

                  157,277,853

-0.8%

Mark-up/return/interest expensed

                     79,005,574

                     93,936,935

-15.9%

Net mark-up/return/interest income

                     77,073,213

                     63,340,918

21.7%

Non mark-up/interest income

 

 

 

Fee, commission and brokerage income

                     12,830,086

                     15,725,077

-18.4%

Dividend income

                           872,029

                       1,123,261

-22.4%

Foreign exchange income

                       3,857,888

                       4,669,102

-17.4%

Income /Loss from derivatives

                           (13,076)

                             64,627

Gain on sale of securities – net

                           610,230

                           216,670

181.6%

Other income

                           687,298

                       1,759,245

-60.9%

Total non-mark-up /interest income

                     18,844,455

                     23,557,982

-20.0%

Total Income

                     95,917,668

                     86,898,900

10.4%

Non mark-up/interest expenses

 

 

 

Operating expenses

                     43,743,044

                     43,843,588

-0.2%

Workers' Welfare Fund

                           873,966

                           747,859

16.9%

Other charges

                           167,335

                             40,109

317.2%

Total non-mark-up/interest expenses

                     44,784,345

                     44,631,556

0.3%

Share of profit of associates

                           504,542

                           776,853

-35.1%

Profit before provision

                     51,637,865

                     43,044,197

20.0%

Provisions and write offs-net

                     17,255,678

                       7,313,543

135.9%

Extra ordinary/ unusual item- charges in respect of pension liability

                                      –  

                                      –  

Profit before taxation from continuing operations

                     34,382,187

                     35,730,654

-3.8%

Taxation

                     13,577,280

                     15,457,158

-12.2%

loss from discontinued operations- net of tax

                             16,373

                       1,225,198

-98.7%

Profit after taxation

                     20,788,534

                     19,048,298

9.1%

Earnings per share – basic and diluted (Rupees) for profit from continuing operations attributable to the ordinary equity share

                               17.12

                               16.60

3.1%

Earnings per share – basic and diluted (Rupees) for profit attributable to the ordinary equity share

17.1

15.6

9.6%

 

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Posted on: 2021-02-25T11:14:00+05:00

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