UBL declares 42% growth in net profit during nine months

UBL declares 42% growth in net profit during nine months

UBL declares 42% growth in net profit during nine months

The profit-after -tax of the banks surged to Rs21.87 billion during July-September 2021, compared with Rs15.38 billion in the same period of the last fiscal year. Photo: File

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KARACHI: The United Bank Limited (UBL) on Wednesday announced a growth of 42 per cent in its profit-after-tax for the nine months (January–September) of 2021, a bourse filing said.

The profit-after -tax of the banks surged to Rs21.87 billion during July-September 2021, compared with Rs15.38 billion in the same period of the last fiscal year.

The board of directors of the bank approved the financial results for the nine months period.

Reversals and stronger NFI have supported the banks’ earnings, while a reduction in the net interest income has put pressure on the earnings in the nine months of the current year, analysts at Arif Habib said.

The bank announced a dividend of Rs4/share, taking the total payout to Rs12/share for the nine months of CY21.

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The net interest income of the bank settled at Rs55.7 billion during the period under review, dropping 7 per cent YoY on the back of a 9 per cent reduction in the interest earned.

Meanwhile, there was a 3 per cent rise in the net interest income QoQ, which possibly came on account of volumetric growth.

The NFI depicted an increase of 22 per cent YoY, owing primarily to strong capital gains (+3x YoY), as well as higher fee income (13 per cent YoY) during the nine months of CY21. On a sequential basis, capital gains for the bank went down 42 per cent QoQ, as the bank booked gains on fixed income securities in the previous quarter.

The bank continued to maintain an impressive control on operating expenses, which showed a 6 per cent YoY/8 per cent QoQ jump, taking cost/income to 46 per cent during the period under review against 65 per cent SPLY.

The bank booked a net reversal of Rs866 million during 9MCY21, compared with the heavy provisioning of Rs15.5 billion SPLY.

This could be on the back of stronger economic activity, helping the bank to book reversals against NPLs.

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The effective tax rate was set at 42.2 per cent during the period under review and 41.9 per cent during the third quarter of CY21.

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