April 17, 2024 (MLN): United Bank Limited (PSX: UBL) has started 2024 on a strong note, recording a profit of Rs16.14 billion [EPS: 13.05] for the three months ended March, marking an 11.53% YoY rise compared to the Rs14.47bn profit reported in the Same Period Last Year (SPLY).
This rally in earnings extends from the past year (2023), wherein the bank recorded its highest-ever profit and dividend payout.
Along with the financial results, UBL has announced an interim cash dividend of Rs11 per share to reward its shareholders.
Going by the income statement, the bank achieved this profit growth even though its net interest income (NII) dropped by 19.59% YoY to Rs28.1bn in 3QFY24.
Although interest earnings surged by 2.63 times, the interest expense spiked by an even greater proportion, resulting in a drop in net earnings.
On the other hand, the bank’s total non-markup income surged 2.3x YoY to Rs21.28bn, owing to a massive gain on the sale of securities worth Rs12.83bn, compared to a loss of Rs637.13m recorded in the 3QFY23.
The gains were further buoyed by a rise in Fee, commission and brokerage income which clocked in at Rs5.94bn, due to improved economic activity.
However, other crucial components such as foreign exchange and dividend income recorded modest drops.
On the expense side, the total non-markup expenses increased by 22.47% to Rs19.87bn in 3QFY24 compared to Rs16.22bn in 3QFY23.
The increase was attributed to the jump in both operating costs and charges towards the Workers' Welfare Fund.
The financial statement further shows that UBL reported a provision expense of Rs1.72bn during the review quarter, compared to a provision reversal of Rs2.71bn recorded in 3QFY24.
On the tax front, the bank paid Rs15.04bn, 41.4% higher than the amount paid in the same quarter last year.
| Consolidated Profit and Loss Account for the quarter ended on March 31, 2024 (Rupees '000) | |||
|---|---|---|---|
| Mar-24 | Mar-23 | % Change | |
| Mark-up/return/interest earned | 243,023,585 | 92,568,156 | 162.53% |
| Mark-up/return/interest expensed | 214,922,381 | 57,620,727 | 272.99% |
| Net mark-up/return/interest income | 28,101,204 | 34,947,429 | -19.59% |
| Non mark-up/interest income | |||
| Fee, commission and brokerage income | 5,937,228 | 4,781,571 | 24.17% |
| Dividend income | 473,165 | 475,449 | -0.48% |
| Foreign exchange income | 2,718,981 | 4,438,640 | -38.74% |
| Income /Loss from derivatives | (64,846) | (37,606) | – |
| Gain on sale of securities – net | 12,828,808 | (637,132) | -2113.52% |
| Net loss on derecognition of financial assets measured at amortized costs | (947,561) | – | – |
| Other income | 330,474 | 234,196 | 41.11% |
| Total non mark-up /interest income | 21,276,249 | 9,255,118 | 129.89% |
| Total Income | 49,377,453 | 44,202,547 | 11.71% |
| Non mark-up/interest expenses | |||
| Operating expenses | 19,190,077 | 15,719,975 | 22.07% |
| Workers' Welfare Fund | 676,423 | 500,158 | 35.24% |
| Other charges | 866 | 1,521 | -43.06% |
| Total non mark-up/interest expenses | 19,867,366 | 16,221,654 | 22.47% |
| Share of profit of associates | (48,299) | (158,245) | -69.48% |
| Profit before provision | 29,461,788 | 27,822,648 | 5.89% |
| Credit loss allowance | (1,717,889) | 2,714,605 | -163.28% |
| Extraordinary/ unusual item- charges in respect of pension liability | – | – | – |
| Profit before taxation from continuing operations | 31,179,677 | 25,108,043 | 24.18% |
| Taxation | 15,040,768 | 10,637,315 | 41.40% |
| Profit after taxation | 16,138,909 | 14,470,728 | 11.53% |
| Earnings per share – basic and diluted (Rupees) | 13.05 | 11.62 | – |
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Posted on: 2024-04-17T12:09:20+05:00
