United Bank Limited (PSX: UBL) reported a 106% year-on-year jump in its after-tax profit to Rs64.7 billion for the half-year ended June 30, 2025, driven by a more than threefold increase in net interest income amid higher interest rate spreads. This compares to Rs31.4 billion earned in the same period last year.
The bank’s earnings per share (EPS) rose to Rs26.07, up from Rs12.58 in 1HFY24, reflecting strong underlying profitability.
UBL’s net interest income grew by a staggering 205% to Rs175.4 billion, compared to Rs57.3 billion last year, benefitting from improved yields and a favourable interest rate environment. Total income surged 113% to Rs208.5 billion, up from Rs97.9 billion a year earlier.
In a stock filing on Saturday, the bank declared an interim cash dividend of Rs8 per share, taking the total payout for the first half of FY25 to Rs19 per share (270%), including an earlier dividend of Rs11 per share.
On the non-markup side, income from fee, foreign exchange, dividends, and securities fell 19% year-on-year to Rs33 billion from Rs40.6 billion. The decline was largely attributed to lower capital gains, as last year included sizeable one-off portfolio gains. Nonetheless, strong momentum in core banking activity partially offset this: fee and commission income rose 43%, foreign exchange income increased 20%, and gains on securities rebounded with a 330% rise.
Operating expenses rose 53% to Rs59.7 billion, reflecting inflationary pressures and growth-related costs, but remained well covered by income growth. Profit before credit loss allowance stood at Rs146.5 billion, up 153% from Rs57.8 billion.
The bank booked Rs3.9 billion in credit loss provisions and write-offs, up 60% year-on-year, reflecting a conservative stance amid macroeconomic uncertainty and ensuring adequate risk coverage.
Tax expenses surged to Rs85.6 billion, more than triple the Rs28.3 billion paid in the same period last year, in line with higher pre-tax earnings and adjusted for recent tax measures.
Despite a dip in miscellaneous recoveries, which brought other income down slightly to Rs0.5 billion from Rs0.6 billion, UBL’s overall profitability profile remained strong, as reflected in its 149% increase in pre-tax earnings to Rs150.4 billion.
The bank’s results position it among the top-performing financial institutions in the country so far in 2025, amid a high-interest rate environment and cautious credit outlook.
