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Karachi, April 17, 2014 (PPI-OT): United Bank Limited| focused on product development:
Currently UBL is more focused on their product development strategy and coming up with new ideas weather it is about channelizing government funds to public by “Watan Card” or back end payment transfer mechanism in newly inaugurated BATS systems at KSE. These transactions are being done by UBL which will enable UBL to channelize more money and increase in its NII and NFI income both.
New products still to come
People who are engaged in fixed income though National Saving Certificates will see a dramatic change in method of monthly payment in coming days because UBL is coming up with its new product to solve this problem. This new product will enable savers to easily withdraw of its payment though ATM machine and UBL will get benefit in term of commission charges on funds mobilization.
1QCY14 result preview:
United Bank Limited (UBL) is scheduled to announce its 1QCY14 financial results on April 18, 2014. Standard Capital expects that the UBL to report noticeable growth in YoY bottom line results. Standard Capital exacts that UBL to record 1QCY14 NPAT of Rs 4.9bn (EPS Rs 4.06) up by 25.7% YoY. With increase in earnings Standard Capital also foresees an increase in payout too by 25% YoY, and company may announce Rs 2.5/sh as interim cash dividend for 1QCY14.
Net Interest Income (NII) to enhance by 16% YoY:
Standard Capital estimates that bank will enjoy a boost in its core income by 16% YoY to Rs 10.2bn against Rs 8.8bn reported in Same Period Last Year (SPLY). Improve in deposit mobilization and hike in discount rate (DR) to boost the core income of bank which will be shown in 1QCY14 results.
15% YoY growth in non-core income:
Standard Capital expects that UBL’s non-core income will also increase by 15% YoY based on improvement in product development in non-core business segments and also commission charges on its services to government and financial institutions.
Valuation: HOLD
At present UBL is trading at PBV of 2.2x and expected PE of 12x and dividend yield of 6.5%. By having its UAE based exposure – UBL could still be compared with MCB which is at PBV of 3x and also PE of 12x. HOLD