UBL profits grow 19pc to Rs11.4bn in 1st half of 2020

United Bank Limited (UBL) posted a year-on-year growth of 19pc in profit after tax (PAT) for the half-year ended June 30, 2020. 

“With a strong build-up in core earnings, revenues were recorded at Rs48.0 billion for 1H2020, up 14pc over 1H2019,” the bank said in a statement issued on Thursday. “Despite inflationary pressures, the cost base remained flat versus last year at Rs19.2 billion, with the cost to income ratio improving from 45.8pc in 1H’19 to 39.9pc in 1H’20.” 

This performance translated to earnings per share (EPS) of Rs9.31 for 1H’20 (1H’19: Rs7.80). The bank maintained its very sound capital position with a Capital Adequacy Ratio (CAR) at 21.1pc in Jun’20, well above the minimum regulatory requirement of 12.5pc.  

UBL is one of the largest private sector banks in Pakistan with a footprint of 1,361 branches and 1,482 ATMs located all across the country, with over 5 million branch banking customers. The bank remains fully committed to its very loyal and growing customer base, while striving to meet expectations across all delivery channels. 

Following the breakout of the Covid-19 pandemic, UBL has taken all necessary steps to ensure continued and uninterrupted services to our customers in a safe environment. Despite the challenges that the pandemic posed, over 95pc of branches remained open for business in this difficult period. 

During the second quarter of 2020, UBL crossed a landmark deposit level of Rs1.5 trillion. Domestic deposits closed at Rs1.3 trillion, growing by 10pc over Dec’19, a net increase of Rs128 billion. This enabled the bank to grow its deposits market share to well over 8pc. 

Islamic Banking continued to gain momentum with a footprint of 100 branches as well as 162 Islamic banking windows. UBL’s portfolio of Islamic deposits now stands at Rs98 billion, with 20pc growth over Dec’19. 

The bank maintained its strategic relationship across the world as the preferred bank for overseas Pakistanis, bringing in home remittances of over $6 billion in the last one year, with a market share of over 25pc. 

UBL remains at the forefront of providing innovative and unique solutions, aimed at making banking easier and accessible for everyone. Building on its digital strategy, the bank aims to transform its products and processes, with an end state of developing a wider payment ecosystem for the country. 

“Our UBL digital app has been gaining a very positive response, with over 1 million customers acquired over the last year. Furthermore, our branchless banking proposition, UBL Omni, is playing a prominent role in promoting greater financial inclusion in the country and continues to be a market leader in providing basic banking services to the large unbanked population. The Omni ‘Dukaan’ network extends to around 35,000 agents spanning over 1,400 cities and towns,” the statement read.  

UBL’s net advances stood at Rs585 billion as at Jun’20 (Dec’19: Rs636 billion). The bank’s loan book is driven by the domestic Corporate Banking Group, maintaining a quality portfolio across diverse industries which includes fertilizers, chemicals, engineering, telecom and pharmaceuticals. Led by autos financing, the domestic consumer loan portfolio stood at Rs16 billion. 

The bank is also an active player in the SME and agri-lending space, with approximately half of our branches dedicated to rural areas. The bank also remains a key partner to large corporate and public sector organizations in meeting their cash management needs. 

As the bank announced strong results for the half-year ended June 30, 2020, UBL’s new President and CEO Shazad Dada said, “It is indeed an honour to be given the responsibility of leading such a premier institution like UBL. I thank the Chairman and the entire Board for placing their trust in me to lead their organization. It is the hard work and dedication of the UBL team which has enabled the bank to grow into a very strong franchise over the years. As we explore the next phase of growth, our future strategy would be driven by the needs of our customers, aspiration to build the highest level of service standards, while leading the digital transformation of financial services in Pakistan. We believe that there is a huge opportunity to grow across all core segments driven by our drive for innovation and leadership position in digital banking.”