United Bank Ltd Reports Strong 3QCY25 Results with Significant Earnings Increase

Karachi: United Bank Ltd (UBL) announced its financial results for the third quarter of the calendar year 2025, reporting a significant increase in net profit after tax (NPAT) to PkR35.3 billion, marking a 93% increase year-over-year and a 24% rise quarter-over-quarter. The bank attributed its robust performance to a higher asset base, which led to improved earnings. Furthermore, UBL declared an interim cash dividend of PkR8.0 per share, bringing the total cash payout for the nine-month period to PkR21.5 per share.

Net interest income (NII) for the quarter was PkR92.0 billion, reflecting a 78% year-over-year increase, driven by a 37% year-over-year rise in the investment book and a 78% year-over-year increase in advances. However, the bank’s net interest margins (NIMs) showed a slight decline to 3.7% from 3.9% in the previous quarter.

Operating expenses were reported at PkR32.5 billion, showing a 36% increase from the previous year but a 9% decrease from the prior quarter. This resulted in a cost-to-income ratio of 30.6%, an improvement from 35.1% in the same quarter last year.

Non-interest income dropped to PkR14.4 billion, marking a 14% year-over-year and 13% quarter-over-quarter decrease, primarily due to a significant decline in gains from the sale of securities. Despite this, the bank saw increases in fee and foreign exchange income by 20% and 46% year-over-year, respectively.

Credit-allowance reversals were notably lower this quarter at PkR822 million, compared to a provisioning expense in the same quarter last year and a reversal in the previous quarter. The effective tax rate decreased to 53% from 58% and 61% in the same quarter of the previous year and the previous quarter, respectively.

UBL’s strong performance is bolstered by a robust deposit base, with CASA levels projected to remain high. The bank’s zero-cost deposit share also contributes to sustaining superior net interest income, supporting a favorable profitability outlook. AKD Securities Limited maintains a ‘Buy’ stance on UBL, setting a target price of PkR476.0 per share by June 2026.