LAHORE: United Bank Limited (UBL -33 per cent) in a notification to Pakistan Stock Exchange (PSX) on Wednesday, released its financial results for the period ended March 31, 2018, announcing profit after taxation of Rs2.79 billion, down 63 per cent from Rs7.25 billion on March 31, 2017.
UBL declared earnings per share (EPS) of Rs2.28, significantly lower than analyst’s projections of Rs5.40 primarily due to booking of one-time pension cost of Rs6.4 billion with an EPS impact of -3.40, higher than the maximum figure of Rs5.9 billion earlier earmarked by management and secondly by the significantly high loan provisions of Rs1.98 billion, highest since 2QCY11.
The result would have been even worse if not for hefty capital gains of Rs3.2 billion on the bonds portfolio, a report note released by IMS Securities said here on Wednesday.
Alongside the result, UBL announced a dividend of Rs3.0 share in line with market expectation. Meanwhile, on the balance sheet, loan and deposit growth have clocked in at 26 per cent and 10 per cent YoY, respectively.
Net Interest Income (NII) of UBL was marginally up in 1Q2018, up 1.5 per cent YoY, where 18 per cent YoY rise in interest income countered a 39 per cent YoY jump in interest expense. Meanwhile, non-interest income rose 15 per cent YoY to Rs8 billion, largely due to capital gains of Rs3.2 billion, up 35 per cent YoY, but core fee income growth of 3 per cent YoY was termed disappointing by market analysts. On the other hand, fee, commission and brokerage income, approx. 43 per cent of non-markup income did not witness material growth. Moreover, admin expenses were flat which was seen as a positive.
Total provision during the outgoing quarter stood at Rs2 billion, primarily on the back of Nonperforming Loans (NPLs) of Rs2 billion in 1Q2018 against a modest Rs56 million in 1Q2017.
At the close of trading at PSX on Wednesday, UBL’s shares closed at Rs201.30 per share, down Rs0.33 or 0.16 per cent with a total of 0.57 million shares traded.