AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Karachi: United Bank Ltd (UBL) released its financial results for the second quarter of the calendar year 2025, showing a mixed performance marked by increased net profit after tax (NPAT) but a decline in quarterly earnings due to higher operating expenses. The bank reported a NPAT of PkR28.6 billion, equivalent to earnings per share (EPS) of PkR11.43, reflecting a 93% year-on-year increase but a 21% drop from the preceding quarter.
The financial results were broadly in line with market expectations. Alongside the results, UBL announced an interim cash dividend of PkR8.0 per share, raising the half-year cash payout to PkR13.5 per share.
The net interest income (NII) for the quarter was reported at PkR91.2 billion, representing a substantial rise of 3.1 times year-on-year and an 8% increase quarter-on-quarter. This growth was attributed to a stronger investment portfolio, which grew by 44% year-on-year and 18% from the previous quarter, alongside a 14% rise in advances.
The bank’s mark-up earned rose by 8% year-on-year and 16% quarter-on-quarter to PkR303 billion, while mark-up expenses were recorded at PkR212 billion, showing a 16% annual decrease but a 20% quarterly increase. The bank’s net interest margins (NIMs) remained steady at 4.2%, consistent with the previous quarter.
Operating expenses saw a significant increase, recorded at PkR35.9 billion, up 76% from the same period last year and 34% from the previous quarter. This increased expense led to a cost-to-income ratio of 32%, compared to 40% in the second quarter of 2024 and 25% in the first quarter of 2025.
Non-interest income decreased to PkR16.6 billion, down 15% year-on-year and 2% quarter-on-quarter. This decline was mainly due to a significant drop in gains on the sale of securities and the lack of unrealized gains on held-for-trading activities that were present during the same period last year. On the other hand, fee income increased to PkR9.0 billion, marking a 61% rise year-on-year and a 20% increase from the previous quarter.
The bank recorded a credit-allowance or provisioning reversal of PkR2.3 billion, which was higher than the previous quarter’s reversal of PkR1.6 billion. The effective tax rate for the quarter was reported at 61%, up from 47% in the same quarter last year and 53% in the first quarter of 2025.
In response to these results, UBL increased its dividend payout to PkR8.0 per share for the second quarter, bringing the total dividend for the half-year to PkR13.5 per share. The performance of UBL’s stock is currently under review.