United Bank Limited has reported net profit increase of 39% to Rs9.3 billion during January to June 2012.
The board of directors in a meeting held in Paris on Wednesday also declared a dividend of Rs2 per share, taking total half-year payout to Rs3 per share, according to unconsolidated results sent to the Karachi Stock Exchange on Wednesday.
The exorbitant improvement in earnings is largely attributable to 78% YoY decline in provisioning charge and increase in non-interest income, said BMA Capital analyst Nurali Barkatali.
Amid shrinking banking sector spreads, net interest income of the bank witnessed a decline of 1%.
On the other hand, non-interest income jumped 26% to Rs25.6 billion on the back of better dividend income from treasury and trading, says analyst.
Moreover, controlled lending along with improved paying capacity of borrowers after decline in interest rates led overall provisioning to decline from Rs4.9 billion to Rs1.3 billion.
Alone in the second quarter, the company reported unconsolidated net profit of Rs4.4 billion, a decline of 8% from the preceding quarter’s Rs4.87 billion. UBL was the top performing private bank among the big four in the first quarter of 2012.
Effective tax rate stood at 33% during January to June 2012 against rate of 36% recorded in the same period last year.
Despite earnings being in line with market estimate, the bank’s stock price declined 1.1% to close at Rs87.90 during trade at the Karachi Stock Exchange.
Published in The Express Tribune, July 19th, 2012.
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