United Bank Limited (UBL), the countrys third largest bank, clocked in a bottom line of around Rs.4.9 billion in 1QCY12, making an outstanding year-on-year growth of 49 percent, with growth rate (unconsolidated net profits) surpassing that of other large peer banks. The profitability growth stems from a sizeable improvement in non-mark-up income coupled with lower provisioning cost. Thriving on expansion in asset base, the Banks top line registered growth. UBLs asset base increased to Rs.818 billion at the end of March 2012, marking a growth of 21 percent relative to the same period last year. The growth in asset base came from expansion in the investment base. UBLs investment to deposit ratio (IDR) stood at around 54 percent as on March 31, 2012, nearly 12 percentage points higher compared to the same period of last year. The revenues from investments accounted from 47 percent of the total mark-up revenues in 1QCY12, as opposed to its share of 40 percent during the same quarter of last year. Deposit expansion resulted in higher mark-up expenses. The Banks deposit base stood at around Rs.614 billion as on March 31, 2012, registering a growth of 16 percent relative to the same period of last year. UBLs net interest income has accrued year-on-year gain of 5 percent in 1QCY12. Decline in KIBOR has squeezed the industrys margins, as evident from the Banks gross spread ratio, which has eased slightly by around 55bps to 54.3 percent in 1QCY12, relative to the same quarter of last year. A noteworthy development was a significant decline in provisioning cost. The provisioning against loans and advances (net) amounted to Rs.607 million in 1QCY12, as opposed to Rs.2.2 billion during the same quarter of last year. Although the bank had managed to drastically reduce rate of growth in Non-Performing Loans (NPLs) during the last year, NPLs rose by 17 percent during the first three months of the CY12 to Rs.59.7 billion as on March 31, 2012. On the heels of a higher income from investment banking activities, dividend income and gain on sale of securities, the Banks non mark-up income grew by 35 percent in 1QCY12, compared to the same period of last year. Higher non mark-up expense, which jumped by 18 percent compared to the same quarter of last year, is symptomatic of high inflationary environment and the Banks growing focus on infrastructure expansion. The operating revenues to expense ratio of UBL stood at 2.4 in 1QCY12, as opposed to 2.52 during the same quarter of last year.
=============================================== United Bank Ltd =============================================== PL Rs(mn) 1QCY12 1QCY11 Chg =============================================== Mark-up Earned 17,696 16,709 6% Mark-up Expensed (8,095) (7,553) 7% Net Markup Income 9,600 9,157 5% Provisioning (766) (2,340) -67% Net Mark-up income after provisions 8,835 6,817 30% Other income 4,094 3,026 35% Operating revenues 13,695 12,183 12% Other expenses (5,699) (4,831) 18% Profit before taxation 7,230 5,012 44% Profit after taxation 4,865 3,273 49% EPS (Rs) 3.97 2.67 ===============================================
Source: Company Accounts
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