UBL posts PKR 36.1 billion net profit in Q1, announces stock split

United Bank Limited (UBL) reported a net profit of PKR 36.1 billion ($128 million) for the quarter ended March 31, 2025, marking a 12.6% increase compared to its full-year net profit of PKR 32.06 billion in calendar year 2022 (CY22). To recall, benchmark interest rates averaged 13.2% in CY22.

The bank’s earnings per share (EPS) for the first quarter of CY25 stood at PKR 29.3, surging 126% from PKR 13.05 in the same period last year. The results exceeded market expectations.

“The bank’s earnings were fueled by a substantial yearly rise of 200% in net interest income, along with a provisioning reversal of PKR 1.6 billion during the quarter,” said an analyst at Arif Habib Limited.

Alongside the earnings report, UBL declared a cash dividend of PKR 11 per share and announced a 2-for-1 stock split.

UBL's net interest income for Q1CY25 reached PKR 84.2 billion, marking a 200% increase from the same period last year. “The increase is attributable to favorable pricing of the investment book, aided by healthy volumetric growth and a higher share of zero-cost deposits,” an analyst at Insight Securities said.

Interest earned rose 7%, while interest expenses declined by 18% year-over-year.

Despite a 26% increase in fee income, non-markup income fell 21%, primarily due to elevated gains on securities in preceding quarters. The bank’s other income also declined by 36.4%, settling at PKR 210 million.

Foreign exchange income stood at PKR 2.4 billion, reflecting an 8.9% decline compared to the corresponding period last year.

On a positive note, fee income posted strong growth, rising 26%.

The bank recorded provisioning reversals of PKR 1.6 billion for Q1CY25, compared to PKR 1.7 billion in Q1CY24. This follows a provisioning charge of PKR 14.2 billion in the last quarter.