UBL rides income, deposit growth in 1QCY23

April 28, 2023 (MLN): United Bank Limited (UBL) posted a profit after taxation of Rs13.90 billion [EPS: Rs11.36], depicting a massive surge of 45.9% YoY, compared to a profit after taxation of Rs9.52bn [EPS: Rs7.78] in 1QCY23.

The notable surge in net profit is primarily attributable to the increase in net mark-up income by 54.9% YoY and stood at Rs33.25bn in 1QCY23, as a result of a well-positioned investment book and efficient cost of deposits.

Non-markup income stood at Rs8.78bn for 1QCY23 up 29.5% YoY, owing to strong growth across major fee-based revenues and foreign exchange income.

On the expenses side, operating expenses inched up by 23.9% YoY and stood at Rs14.52bn in 1QCY23 as a result of significantly higher inflation levels, devaluation of the rupee, and higher overheads across the network.

Lower costs were achieved due to the bank’s aim to reduce its costs while investing in its people and the IT / digital and physical facilities that enable a wide network and improved customer service.

Despite the increase in the expenses of the bank, the cost-to-income ratio continued to improve and stood at 34.6% in 1QCY23 as compared to 41.5% in the last year.

During the period under review, the bank’s domestic deposits grew by 7% YoY to Rs1.60 trillion in 1QCY23, with a net increase of Rs105bn, while its domestic CASA deposits increased by 9% YoY to Rs1.44 trillion in 1QCY23, resulting in a strong CASA ratio of 89.6% in 1QCY23 compared to 87.8% in 1QCY22.

The bank also added approximately 233,000 new current account relationships in 1QCY23, which was higher than the 162,000 current account relationships added in 1QCY2, and this led to a 12% YoY growth in average current deposits to Rs757bn in the review period.

On the tax front, the bank paid Rs10.49bn, 66.1% YoY more than the amount paid in 1QCY23.

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