AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Karachi: United Bank Ltd (UBL) has reported a robust financial performance in the first half of the calendar year 2025, with unconsolidated profits soaring to PkR63.8 billion, marking a 2.2-fold increase compared to the same period last year. This growth comes despite facing a decline in non-interest income and rising operating expenses.
The bank’s interest earned witnessed a 9% increase year-on-year, reaching PkR564.0 billion. This was largely attributed to a 51% year-to-date rise in investments, offset by falling yields. Meanwhile, UBL managed to reduce its interest expenses by 16% year-on-year, even with significant increases in deposits and borrowings.
On the non-interest income front, UBL experienced a 21% decline to PkR30.8 billion, due primarily to reduced capital gains. However, there was notable growth in fee and commission income, with remittance income, card-related fees, and corporate services fees all showing significant year-on-year increases.
Operating expenses rose by 64% year-on-year to PkR58.5 billion, yet the bank’s cost-to-income ratio improved, indicating better efficiency in managing its expenses relative to income.
The bank’s investment book expanded by 51% over December 2024. Fixed PIBs and Sukuks within the investment book yield approximately 14.9% with varying maturities. Deposits also saw a substantial increase of 63%, driven by growth in current and saving accounts, though the current account to total deposits ratio showed a decrease.
UBL’s management has expressed confidence in outpacing industry deposit growth in the upcoming year, emphasizing strategic lending practices focused on high-spread opportunities. The bank also highlighted its commitment to Islamic banking, having converted all branches in KPK and Balochistan to Shariah-compliant operations.
UBL maintains a capital adequacy ratio of 23.4%, significantly higher than the regulatory requirement, and plans to continue its current cash payout levels while using excess profits to bolster its balance sheet.
The bank’s performance in the remittance and trade markets remained strong, with significant market shares reported. Management remains optimistic about future growth, despite the challenges faced in the broader economic environment.