Qudsia Bano

The United Bank Limited (UBL) has released its financial results for the period ending September 30, 2023, showcasing a robust performance marked by a substantial growth in key financial indicators. The bank reported a significant uptick in markup interest earned for the three months ending September 30, 2023, reaching PKR147.35 billion. This represents an impressive 101% year-on-year (YoY) growth, reflecting the bank's ability to capitalize on favorable interest rate conditions and expand its interest-earning assets, reports WealthPK. The Net Markup Interest Income for the quarter amounted to PKR37.78 billion, indicating a commendable 37% YoY growth. This growth is indicative of the bank's effective management of its interest-bearing assets and liabilities, contributing to its core operational strength. However, the Non-Markup Interest Income witnessed a substantial decline of 87%, reaching PKR927 million.

This decline may be attributed to specific events or changes in the economic environment impacting non-interest income sources. A closer examination is necessary to understand the factors contributing to this decline. The bank’s total income for the three months stood at PKR38.70 billion, marking a solid 10% YoY growth. This comprehensive metric reflects the bank's ability to generate income from various sources, contributing to its overall financial resilience. The bank reported a profit before tax of PKR28.47 billion, reflecting a robust 73% YoY growth. The profit after tax surged by an impressive 111%, totaling PKR14.55 billion. This remarkable performance underscores the bank’s efficiency in managing costs and risks, contributing to its overall profitability. The earnings per share for the three months of 2023 stood at PKR11.88, showcasing a substantial 111% YoY growth. This metric highlights the bank's commitment to delivering value to its shareholders.

For the nine months ending September 30, 2023, the bank’s markup interest earned reached an impressive PKR337.21 billion, reflecting a substantial 91% YoY growth. The net markup interest income for the nine months amounted to PKR106.64 billion, marking a notable 47% YoY growth. In contrast to the three months, non-markup interest income for the nine months witnessed a decline of 41%, reaching PKR13.13 billion. The bank’s total income for the nine months stood at an impressive PKR119.76 billion, marking a substantial 26% YoY growth. The profit before tax recorded a robust 56% YoY growth, reaching PKR79.05 billion.

The profit after tax surged by an impressive 118%, totaling PKR40.87 billion. This remarkable performance underscores the UBL's efficiency in managing costs and risks, contributing to its overall profitability. The earnings per share for the nine months of 2023 stood at PKR33.38, reflecting a substantial 118% YoY growth. This metric highlights the bank's commitment to delivering value to its shareholders.

The net profit margin, indicating the percentage of revenue retained as net income, witnessed a gradual decline from 13.75% in CY2020 to 12.79% in CY2022. The earnings per share (EPS) Growth, a crucial metric for evaluating a company's profitability on a per-share basis, showed a more moderate growth trajectory. The EPS growth rate declined from a substantial 47.80% in CY2021 to 3.80% in CY2022. The price/earnings to growth (PEG) ratio offers insights into a company's valuation relative to its earnings growth. A PEG ratio of around 1 is generally considered a fair value. The bank’s PEG ratio increased from 0.11 in CY2021 to 1.01 in CY2022, indicating a shift towards a potentially overvalued position relative to its earnings growth rate.

ABOUT the BANK

The United Bank Limited is a banking company incorporated in Pakistan and is engaged in commercial banking and related services. The bank is a subsidiary of Bestway (Holdings) Limited, which is a wholly owned subsidiary of Bestway Group Limited.

Credit: INP-WealthPk