UBL maintains its momentum with strong results, increasing profit after tax by 46% year over year to Rs. 13.9 billion for Q1’23 from Rs. 9.5 billion for Q1’22. EPS for the first quarter of 2023 was Rs. 11.36, up from Rs. 7.78 for the same period in 2022. The Board of Directors decided to pay a consistently high dividend of Rs. 11.0 per share for the first quarter of 2023 at their meeting on April 28, 2023, which was held in Islamabad. With an ROE of 28% (up from 22% in March of last year) and a Capital Adequacy Ratio (CAR) of 17.6% as of March 23, UBL is maintaining healthy capital levels.
UBL reports strong top-line revenue growth of 49% and increased cost vigilance:
The growth in the deposit base and a well-positioned investment portfolio were the primary factors in the Bank’s gross revenues, which increased by 49% to Rs. 42.0 billion. The Bank’s net markup income for the first quarter of this year was Rs. 33.3 billion, up 55% from the same period last year, thanks to strong increases in average earning assets and an improvement in net interest margins (NIMs), which went from 4.3% to 5.2%.
Non-Fund Income (NFI), which made up 21% of total gross income in the first quarter of 23 was reported at Rs. 8.8 billion. In Q1’23, fees from branch banking operations, income from debit and credit card fees, and a doubling of income from the trade and guarantee business contributed to the 4.3 billion rupee increase in fee and commission income. Due to proactive balance sheet positioning and active trading, the Bank saw foreign exchange income of Rs. 4.3 billion for the first quarter of 23 as opposed to Rs. 1.3 billion the previous year.
In the eyes of Pakistanis living abroad, UBL continues to be their preferred business partner. As a result, the Bank reported a market share of over 21% in the home remittances industry with Q1’23 revenue from net commissions of Rs. 503 million.
UBL reduced its cost-to-income ratio to 35% from 42% last year by strictly controlling expenses and keeping a laser-like focus on cost-cutting measures, despite significant inflationary pressures.
One of Pakistan’s largest branch networks serving the country:
With a network of 1,343 branches (including 1,335 in Pakistan), deposits exceeding Rs. 2.1 trillion, and net advances reaching Rs. 711 billion as of Mar’23, UBL is still providing services to an increasing number of customers. With a strong increase of 12% in average current deposits in 2023, the bank’s focus remained on increasing its core deposits. The average current to total deposits ratio increased to 47.1% in the first quarter of 23 from 45%, and the strong CASA ratio reached 90%.
UBL is still committed to fulfilling its role as an economic intermediary, with average performing advances increasing by 31% to Rs. 826 billion, primarily as a result of a strong buildup across the Corporate segments. The Bank kept expanding the size of its business in the Islamic banking sector, as the segment’s loan book averaged Rs. 84 billion for Q1’23, up 36% from the previous quarter.
UBL Ameen is a successful Islamic company that has expanded its footprint in its target markets:
Islamic banking continues to be a top priority, and UBL is actively growing within this rapidly expanding industry. In addition to its 150 branches, UBL Ameen also has over 500 Islamic Banking Windows (IBWs) within its commercial branches (219 IBWs as of December 22). As a result, the average deposit base at UBL Ameen increased by 15.7% annually to Rs. 169 billion as of March 23. The bank will keep aggressively growing UBL Ameen because it sees the Islamic market as a huge opportunity for growth.
Digital Banking – Remains the market leader and receives accolades:
The Bank continues to put its attention toward developing its nationally recognized, award-winning digital banking services. With ease and convenience across all digital channels, UBL’s digital services aim to provide banking customers with a world-class service proposition. The bank has received awards from both national and international organizations for its financial services in augmented and virtual reality, mobile banking, and payment initiatives.
Nearly 20 million financial transactions were made in 2023, an increase of 76%, and their total value increased by 91% to more than Rs. 1 trillion as of the first quarter of that year. Additionally, 50% of the bank’s active customers have switched to using digital channels, which is a glaring sign of where banking services are headed in the future.
Mr. Shazad G. Dada, President & CEO of UBL, commented on the outcomes and said;
“Our results are evidence of the importance we place on providing world-class service to our clients and strong shareholder value to our investors,” the company said. We have consistently improved our technology platforms and award-winning digital banking capabilities while delivering strong performance across all core segments. Our competitive advantage continues to be in our ability to establish ourselves as a trustworthy business partner to our esteemed clients, in using our network to find growth opportunities, and in our ongoing investment in our human resources. Our cost-to-income ratios have significantly improved as a result of our financial responsibility and increased vigilance in cost control during these difficult times. All of this, however, would not have been possible without the extraordinary efforts of our 13,500+ employees. I am proud of their tenacity, dedication, and commitment, which continue to be the foundation of our success.”
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