United Bank Limited (UBL) has announced its financial results for the third quarter of 2024, posting a record-breaking quarterly profit of Rs. 18.3 billion, with earnings per share (EPS) of Rs. 14.96. This represents a 24% increase year-on-year (YoY) and quarter-on-quarter (QoQ), marking the highest quarterly profit in the bank’s history, according to Topline Securities.
For the first nine months of 2024, UBL’s earnings have reached Rs. 40.12 per share, up 18% YoY. In conjunction with these results, the bank declared a third interim cash dividend of Rs. 11 per share, bringing the total dividend for the nine months to Rs. 33 per share.
The bank’s Net Interest Income (NII) for 3Q2024 rose to Rs. 52 billion, a 30% increase YoY and 77% QoQ. This growth was driven by higher asset yields, a favorable asset repricing gap, and positive yields on Repo borrowings.
UBL’s Non-Interest Income surged by 102% YoY to Rs. 16 billion in 3Q2024, largely due to a significant gain on securities, which amounted to Rs. 5.9 billion compared to Rs. 284 million in the same quarter last year. Additionally, the bank saw a 32% YoY increase in fees and commission income and a 49% YoY rise in foreign exchange income.
In its unconsolidated accounts, UBL reported a gain of Rs. 7.3 billion in 3Q2024, primarily from the sale of its subsidiary, United National Bank Limited (UNBL UK).
The bank recorded a provision expense of Rs. 894 million in 3Q2024, contrasting with a reversal of Rs. 664 million in 2Q2024 and Rs. 993 million in 3Q2023. Operating expenses increased by 26% YoY and 18% QoQ, driven by inflationary pressures and an expanding branch network.
UBL’s cost-to-income ratio improved to 35% in 3Q2024, down from 40% in 3Q2023 and 42% in 2Q2024.
The bank’s effective tax rate was 57% in 3Q2024 and 52% for the first nine months of 2024, reflecting additional taxes due to a lower Advances to Deposits Ratio (ADR). As of June 2024, UBL’s gross ADR stood at 25.2%, the lowest in the sector.
Currently, UBL’s stock is trading at a 2024 estimated price-to-earnings (PE) ratio of 5.4x, a price-to-book value (PBV) ratio of 1.3x, and offers a dividend yield of 15%.
