KARACHI: United Bank Limited (UBL) on Monday announced financial results for the second quarter ended June 30, 2021 which unveiled Rs7.6 billion profit after tax (PAT) for the period.
According to the financial results, UBL posted a profit after tax of Rs7.6 billion for 2QCY21 translating to an EPS (earning per share) of Rs6.2, up by 25 percent on a year-on-year basis. The results beat estimates.
The deviation is mainly on account of better than expected NIMs at 3.6 percent and recognition of provisioning reversal worth Rs441 million during the quarter. Consequently, the stock has reacted positively (+2.23 percent) post announcement of result. The result was accompanied with an interim cash dividend of Rs4.0 per share.
According to an analysis of KASB Securities, UBL’s profitability increased 25 percent YoY during 2QCY21 attributed to i) provisioning reversal and ii) higher NFI. Sequentially, reversal in provisioning expenses offset the decline in NIMs by 350 bps that translated into flattish earnings on QoQ basis.
It said that NFI increased by 17 percent YoY in 2QCY21 on account of a 37 percent YoY jump in fee income that lent support to the bottom-line. The bank recorded a higher effective tax rate of 45 per cent which we believe is attributed to new taxation measures in the budget 2021-22. Additionally, C/I improved to 44 percent as opposed to 52 percent in the corresponding period last year that improved UBL’s profitability, said KASB Securities.
