UBL profit soars 21% to Rs11.2b
The largest of the lot, United Bank Limited’s (UBL) net profit increased 21 per cent to Rs11.2 billion on the back of a decrease in bad loans and higher net interest income.
The bank’s board of directors, in a meeting in Abu Dhabi, announced a higher-than-expected cash dividend of Rs4 per share, taking cumulative payout to Rs5 for every Rs10 share in 2010.
The growth in earnings is primarily due to a 29 per cent decline in provision against non-performing loans, which stood at Rs6.8 billion in 2010 compared with Rs9.6 billion last year, said Topline Securities analyst Farhan Mahmood.
“Although net interest income grew by 3.6 per cent to Rs34 billion amid higher spread between lending and deposit rates, a 4.5 per cent rise in operating expenses somehow mitigated the impact on the bottom-line,” added Mahmood.
Loan losses dropped by 29 per cent to Rs6.8 billion due to a slowdown in new build-up.
By leveraging its improved IT infrastructure, UBL is participating in government’s financial assistance programme through Watan Card and Omni banking. Based on expanded outreach amid cash aid disbursement, UBL’s fee income increased seven per cent to Rs6.3 billion.
However, despite growth in fee income, non-interest income fell 11 per cent due to considerably higher derivative income booked in 2009 and relatively low dividend income in 2010.
Askari Bank profit falls
Askari Bank’s profit fell 14 per cent to below Rs1 billion, according to the bank’s unconsolidated results for 2010. However, the bank declared a dividend in proportion of 10 shares for every 100 shares.
Bottom-line of the bank dropped to Rs943 million in 2010 compared with Rs1.1 billion in the preceding year.
Mybank losses decrease
Mybank’s losses decreased 36 per cent to Rs1.04 billion in 2010 compared with Rs1.6 billion last year.
UAE-based Suroor Investment recently acquired Mybank and merged it with Arif Habib Bank and Atlas Bank to make Summit Bank. Both company shareholders approved the deal and the transaction is expected to be completed by March.
Published in The Express Tribune, February 22nd, 2011.
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