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UBL’s profits struck by half on account of larger provisions and pension liabilities

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October 18, 2018 (MLN): United Bank Limited (UBL)’s consolidated profits for the nine month period ended on September 30, 2018 shrunk by half due to augmented provisions and accruals for pension liabilities.

As compared to the period ended September 30, 2017, UBL’s net mark-up/return/interest income after provisions dropped significantly by 16% or Rs.7 billion.

While income from dealing in foreign currencies multiplied by more than half, its impact was nullified due to higher administrative expenses.

In addition to this, accruals in respect of pension liability accounted for another Rs.8.7 billion in outflows, dragging the profits down from Rs.19.5 billion to Rs.9.5 billion over the year.

The company’s earnings per share have logged in at Rs.7.96 per share, marking a negative change of about 50%.

In its Board of Directors meeting, the company further recommended an interim cash dividend at Rs.2 per share (20%), in addition to the interim dividend already paid at Rs.6 per share (60%).

Consolidated Profit and Loss Account for the nine months ended September 30,2018 (Rupees '000)

 

Sep-18

Sep-17

% Change

Mark-up/return/interest earned

                     86,991,106

                     80,621,771

7.9%

Mark-up/return/interest expensed

                  (43,553,484)

                  (37,245,028)

16.9%

Net mark-up/return/interest income

                     43,437,622

                     43,376,743

0.1%

Provisions against loans and advances – net

                     (6,190,069)

                        (103,188)

5898.8%

Reversal of provision against lendings to financial institutions – net

                           124,118

                               8,260

1402.6%

Provision for diminution in value of investments – net

                     (1,344,757)

                        (209,967)

540.5%

Bad debts written off directly

                        (104,454)

                        (136,637)

-23.6%

 

                     (7,515,162)

                        (441,532)

 

Net mark-up/return/interest income after provisions

                     35,922,460

                     42,935,211

-16.3%

Non mark-up/interest income

 

 

 

Fee, commission and brokerage income

                     11,447,163

                     10,470,520

9.3%

Dividend income

                       1,045,814

                       1,031,875

1.4%

Income from dealing in foreign currencies

                       2,843,801

                       1,535,891

85.2%

Gain on sale of securities – net

                       4,793,268

                       4,295,042

11.6%

Unrealized gain of revaluation of investments classified as held for trading

                                        6

                           (20,907)

-100.0%

Other income

                           632,474

                           598,064

5.8%

Total non-mark-up /interest income

                     20,762,526

                     17,910,485

15.9%

 

                     56,684,986

                     60,845,696

 

Non mark-up/interest expenses

 

 

 

Administrative expenses

                  (30,733,737)

                  (28,462,966)

8.0%

Other (provisions)/write-offs – net

                        (473,456)

                           (76,173)

521.6%

Workers' Welfare Fund

                        (424,918)

                        (638,724)

-33.5%

Other charges

                           (43,358)

                           (59,039)

-26.6%

Total non-mark-up/interest expenses

                  (31,675,469)

                  (29,236,902)

8.3%

 

                     25,009,517

                     31,608,794

-20.9%

Share of income/(loss) of associates

                           455,007

                           342,570

32.8%

Profit before taxation

                     25,464,524

                     31,951,364

-20.3%

Extraordinary/unusual item – Accrual in respect of pension liability

                     (8,746,607)

                                      –  

 

Taxation

                     (7,224,512)

                  (12,498,938)

-42.2%

Profit after taxation

                       9,493,405

                     19,452,426

-51.2%

Earnings per share – basic and diluted (Rupees)

                                  7.96

                               15.81

                 (0.50)

 

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Posted on: 2018-10-18T15:43:00+05:00

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