Higher gains on securities: UBL’s profit up 12 percent during Jan-March

United Bank Limited (UBL), one of the country’s largest commercial banks, posted consolidated earnings of Rs16.14 billion for the first quarter of the ongoing calendar year, up nearly 12 percent from the profit-after-tax Rs14.47 billion in the same period of the preceding year.

According to a notice sent to the Pakistan Stock Exchange (PSX) on Wednesday, earnings per share clocked in at Rs13.05 for the three months. The bank’s Board of Directors also announced an interim cash dividend at Rs11 per share i.e. 110 percent.

“UBL hit new profitability peak at Rs13.1/share, propelled mainly by higher gains on securities,” said Arif Habib Limited (AHL), in a note.

Despite earning a higher mark-up, the bank saw its net mark-up/return decrease from Rs34.95 billion in 1QCY23 to Rs28.1 billion in 1QCY24, a significant decline of nearly 20 percent.

The fee and commission income earned by the bank in 1QCY24 amounted to Rs5.94 billion, an increase of 24 percent against Rs4.78 billion earned in the same period last year. However, foreign exchange income of the firm showed a massive decline of nearly 39 percent down from Rs4.44 billion in 1QCY23 to Rs2.72 billion in 1QCY24.

On the other hand, the bank sustained massive net gains on securities to the tune of Rs12.83 billion in 1QCY24, in comparison to a loss of Rs637.1 million in SPLY. UBL’s dividend income remained largely stable, with a nearly 1 percent decrease YoY.

During 1QCY24, UBL’s non-mark-up income rose to Rs21.28 billion, an exponential jump of 130 percent, as compared to Rs9.25 billion in SPLY. The bank’s operating expenses of the firm amounted to Rs19.19 billion, up 22 percent against Rs15.72 billion in SPLY.

The firm reported a sharp hike in expenditure on worker welfare funds which increased by over 35 percent during the period. UBL spent Rs500.15 million under this head in 1QCY23 and Rs676.42 million in 1QCY24.

UBL’s profit before tax stood at Rs31.18 billion in 1QCY24, an increase of over 24 percent compared to Rs25.1 billion in SPLY.