UBL reports pre-tax profit of Rs 34.2 billion for the six months ended June 30, 2022,

0

UBL reported profit before tax (PBT) of Rs. 34.2 billion for the six months ended June 30, 2022, an impressive growth of 32% compared to last year. The Bank recorded a one-time tax adjustment related to the profits of the previous year as well as higher taxation due to a change in tax regime amounting to Rs. 9.0 billion during the period.

This impacted earnings per share (EPS) for the period, which was measured at Rs. 9.69 (H1’21: Rs. 12.25). Excluding tax impact, UBL’s EPS was Rs. 16.9, while RoE is measured at 23.9% for H1’22 (H1’21: 19.5%).

UBL’s capital base remains strong, with the capital adequacy ratio (CAR) measured at 18.8% as of June 22, an excess of 6.3% over regulatory minimum requirements. The Bank has declared dividends of Rs. 4.0 per share for the second quarter of 2022, bringing the overall dividend payout to Rs. 9.0 per share for the six months ended June 30, 2022.

The Bank achieved gross income of Rs. 59.8 billion for H1’22, an increase of 29% over last year. Mark-up income increased significantly by 29%, driven by active accumulation within the Bank’s low-cost funding base, deployed in a portfolio of assets whose revaluation is well in line with interest rates. market interest.

Unmarked revenue of Rs. 14.7 billion was earned in H1 22, well ahead of last year, due to a significant increase in foreign exchange revenue as well as strong revenue growth across all major services paying.

The cost/income ratio further improved to 40% from 43% last year. Provisioning charges remained under control with strong recoveries against non-performing accounts in the domestic and international businesses.

Serving a customer base of over $11 million with one of the largest branch networks in Pakistan. UBL is one of the leading financial institutions in this country. The Bank operates one of the largest branch networks with 1,338 branches, including 150 Islamic branches, 1,441 ATMs nationwide and 193 Islamic banking windows. The physical network is well supported by the Bank’s award-winning and industry-leading digital banking services, as well as UBL Omni, the Bank’s branchless banking proposition, which serves even the most remote locations, providing access to services banks to the vast unbanked population.

The Bank’s Branch Banking Group remains the cornerstone of the UBL franchise. Domestic deposits averaged Rs. 1.5 trillion for H1’22, an increase of 7%. The Bank integrated 302,000 current account relationships in H1’22, which translated into strong growth of 12% in average demand deposits. This accumulation made it possible to improve the average CASA ratio from 85% to 87% and to contain the cost of deposits at 5.1% for H1’22 (H1’21: 3.4%), despite the significant increase in interest rate over the period.

UBL continues to bring new financial solutions to its growing and diverse customer base. During the year, the Bank introduced the UBL Urooj account specifically for our female clients, which offers comprehensive financial coverage with loans, insurance facilities and reduced fees to encourage women to invest for the future and to gain financial independence. Additionally, our industry-first High Net Worth product, Signature Priority Banking, was revitalized during the year, with the goal of providing luxury services to this valuable customer segment and in full growth.

UBL also remains an active participant in all major economic initiatives of the Government of Pakistan and the State Bank of Pakistan (SBP). We are a top partner in SBP’s Roshan Digital initiative, having opened over 83,000 accounts, with inflows of over $646 million.

The Bank continues to play an important role in the “Mera Pakistan MeraGhar” initiative, with volumes of over Rs. 5.0 billion.

Digital Banking – Best in class serving nearly 3 million customers

The Bank’s digital services under the UBL Digital umbrella have transformed the way customers interact with the Bank for their financial needs. Our strategy is to be agile to respond quickly to disruptions and integrate cross-functional activities into a seamless banking experience. The envisioned end state is a broader payment ecosystem where all banks’ services are easily accessible to our customers at a single point of contact.

UBL consistently sets a record for digital guest registrations each year. Our Digital Banking app, UBL Digital, continues to set the industry standard, delivering better, faster and easier digital banking with the goal of maintaining lasting relationships with our customers. Our digital customer base currently stands at 2.9 million, including Asaan mobile accounts, with the number of financial transactions growing by 51%.

The Bank has expanded its range of digital products with the recent introduction of the car loan facility on the app. This feature allows customers to access cars and installment plans through a simple and digitally interactive process. With just a few clicks, customers can scan a car in Augmented Reality (AR), take a 3D tour, calculate loan repayments, and compare different cars of their choice.

In recognition of our industry-leading services, UBL has again been named Best Digital Bank in Pakistan by Euromoney Associate Asiamoney for the third time in a row. This award is a testament to UBL’s contribution to expanding the reach of financial services through digital channels. The Bank continues to invest in digital platforms and the development of its teams that are redefining the future of banking in Pakistan.

Non-grossed revenue grows 29% – strong momentum across all major avenues

The Bank’s Non-Fund Related Income (NFI) was reported at Rs. 14.7 billion for H1’22, contributing 25% to total gross income. Fee revenue of Rs. 7.8 billion was earned in H1’22, with an increase of 17%, as strong momentum was seen across all major businesses. The Bank remains the preferred choice of the Pakistani Diaspora abroad as we have recorded a market share of over 21% in the home remittance space with commission income of Rs. 918 million earned. The Bank also maintained its strong market presence within the bancassurance business with fee income of Rs. 822 million earned and premium volumes of Rs. 1.8 billion written in H1’22 .

UBL continues to expand within the growing Islamic business segment

The Islamic business segment has grown phenomenally over the past few years. UBL views the Islamic space as a great opportunity for aggressive expansion and the Bank, with its Islamic banking proposition, UBL Ameen, is actively strengthening its presence. UBL Ameen’s branch network now has 150 branches (21 December: 145 branches) and is further supported by 193 Islamic Banking Windows (IBW) within the commercial branches. UBL Ameen’s deposit base closed at Rs. 208 billion as of June 21, up 49% from December 21, while Islamic advances averaged Rs. 63 billion for H1 22, i.e. doubling compared to last year.

International operations maintain stability amid economic uncertainty

UBL International posted a PBT of USD 9.1 million for the first half of 22, with the Bank’s operations in the GCC now reflecting stability, following specific risk reduction measures over the past few years. The Bank now operates a lean business model with an emphasis on maintaining high levels of credit quality and creating a low cost funding base. Asset sales remain selective, serving clients with good credit histories as well as more FI and commercial loans. Profitability in this period was impacted by a provision charge on its Sri Lankan sovereign debt holdings.

Loan portfolio grows 17% with improved credit quality

UBL continues to grow in its intermediation role within the economy as performing advances averaged Rs. 640 billion in H1’22, a strong growth of 19%. The Bank is actively working on more technology-driven solutions, aiming to provide a full suite of customized products to our customers. The Bank maintained its momentum in the corporate sector, with the average loan portfolio growing by 14%. The Bank continues to grow in the mid-market segment, with the average SME and agriculture loan portfolio growing 17% year-on-year. Deepening customer relationships helps improve returns through the provision of cross-selling and ancillary activities, which has enabled the Bank to record 31% growth in revenue from trade and guarantee activities and 10% growth in cash management revenues.

Commenting on the results, Mr. Shazad G. Dada, President and CEO of UBL said:

“UBL continued to build on its growing business momentum in 2022, which translated into strong financial results. These results reflect the confidence our clients place in the quality of our services and the UBL brand. Our digital capabilities are recognized both locally and internationally and demonstrate our industry-leading position in innovation and technology.As one of the largest financial institutions in the country and leveraging our digital capabilities we are leading the way in expanding the reach of financial services across Pakistan.We are investing heavily in our physical and digital networks and in our people, with continuous efforts to make our service levels the best in class. industry We have also invested in and implemented global best practices in compliance and governance (including financial crime); and our regtech framework, solutions and processes are best in class for the banking industry in Pakistan. Additionally, we are fully committed to establishing ESG standards and best practices across the country’s corporate landscape. UBL, I believe, is very well positioned to reach even greater heights as we aim for much greater market share and growth across all business segments in the near future.

Share.

Comments are closed.