February 21, 2024 (MLN): United Bank Limited (PSX: UBL) recorded its highest profit worth Rs56.47 billion [EPS: Rs45.05] in 2023, depicting a surge of 76.1% YoY, compared to the profit of Rs32.06bn [EPS: Rs25.74] reported in the same period last year (SPLY).
Along with the financial results, UBL has announced a final cash dividend of Rs11 per share i.e. 110% to reward its shareholders.
This is in addition to the interim Dividend already paid at Rs33 per share i.e. 330%
It is worth noting that the bank has recorded its highest-ever payout, alongside declaring its highest profit in a financial year.
Going by the income statement, the bank witnessed an increase of 38.27% YoY in its net interest income (NII) to stand at Rs148.98bn, compared to Rs107.74bn in SPLY.
The surge in interest earnings, amounting to Rs535.21bn (+2.08x), is attributed to interest rates peaking at 22% in 2023.
However, a notable element here is that the bank’s total non-markup income dropped 35.25% YoY to Rs23.96bn, owing to a massive loss on the sale of securities of Rs11.58bn, compared to a gain of Rs560.59m recorded in the SPLY.
Under the non-markup income, the bank’s other income also plunged to Rs1.52bn in 2023, down by over 81% YoY.
Despite this drop, UBL’s interest earnings were significant enough to offset the impact of the decline in non-markup income.
The financial statement further shows that UBL reported a provision expense of Rs11.13bn during the review period, compared to a provision reversal of Rs17.6bn recorded in 2022.
On the expense side, the total non-markup expenses increased by 24.85% to Rs72.49bn in 2023 compared to Rs58.06bn in 2022.
The increase was attributed to the jump of 23.71% YoY in operating expenses from Rs56.66bn in 2022 to Rs70.09bn in 2023.
Similarly, the bank’s expenses related to the Workers' Welfare Fund and other charges also went up during the review period.
On the tax front, the bank paid Rs54.11bn, 48.77% higher than the amount paid in 2022.
| Consolidated Profit and Loss Account for the year ended on December 31, 2023 (Rupees '000) | |||
|---|---|---|---|
| Dec-23 | Dec-22 | % Change | |
| Mark-up/return/interest earned | 535,211,524 | 257,829,501 | 107.58% |
| Mark-up/return/interest expensed | 386,236,455 | 150,086,273 | 157.34% |
| Net mark-up/return/interest income | 148,975,069 | 107,743,228 | 38.27% |
| Non mark-up/interest income | |||
| Fee, commission and brokerage income | 19,751,084 | 17,243,484 | 14.54% |
| Dividend income | 1,614,470 | 1,536,659 | 5.06% |
| Foreign exchange income | 12,715,845 | 8,595,998 | 47.93% |
| Income /Loss from derivatives | (65,266) | 963,928 | – |
| Gain on sale of securities – net | (11,580,659) | 560,588 | -2165.81% |
| Other income | 1,523,109 | 8,103,725 | -81.20% |
| Total non mark-up /interest income | 23,958,583 | 37,004,382 | -35.25% |
| Total Income | 172,933,652 | 144,747,610 | 19.47% |
| Non mark-up/interest expenses | |||
| Operating expenses | 70,093,696 | 56,661,960 | 23.71% |
| Workers' Welfare Fund | 2,158,813 | 1,352,568 | 59.61% |
| Other charges | 240,326 | 48,862 | 391.85% |
| Total non mark-up/interest expenses | 72,492,835 | 58,063,390 | 24.85% |
| Share of profit of associates | (989,536) | (650,058) | 52.22% |
| Profit before provision | 99,451,281 | 86,034,162 | 15.60% |
| Provisions and write offs-net | (11,133,284) | 17,598,771 | -163.26% |
| Extraordinary/ unusual item- charges in respect of pension liability | – | – | – |
| Profit before taxation from continuing operations | 110,584,565 | 68,435,391 | 61.59% |
| Taxation | 54,113,644 | 36,374,642 | 48.77% |
| Profit after taxation | 56,470,921 | 32,060,749 | 76.14% |
| Earnings per share – basic and diluted (Rupees) for profit from continuing operations attributable to the ordinary equity share | 45.05 | 25.74 | – |
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Posted on: 2024-02-21T12:36:51+05:00
