UBL Reports Record Quarterly Earnings of Rs. 18.3 Billion for 3Q-2024

KARACHI–United Bank Limited (UBL)has announced its financial results for the third quarter of 2024, posting a record profit of Rs. 18.3 billion, translating to earnings per share (EPS) of Rs. 14.96. This marks a significant 24 percent year-on-year (YoY) and quarter-on-quarter (QoQ) growth. According to Topline Securities, this is the highest-ever quarterly profit recorded by the bank. With this strong performance, UBL’s earnings for the first nine months of 2024 (9M2024) reached Rs. 40.12 per share, reflecting an 18 percent YoY increase. Alongside the results, UBL also declared a third interim cash dividend of Rs. 11 per share, bringing the total dividend for 9M2024 to Rs. 33 per share. In 3Q2024, UBL recorded a provision expense of Rs. 894 million, compared to a reversal of Rs. 664 million in 2Q2024 and a provision of Rs. 993 million in 3Q2023. Operating expenses increased by 26 percent YoY and 18 percent QoQ, driven by inflationary pressures and the bank’s expanding branch network. However, despite the rise in expenses, UBL’s cost-to-income ratio improved to 35 percent in 3Q2024, down from 40 percent in 3Q2023 and 42 percent in the previous quarter, reflecting better operational efficiency. The bank’s effective tax rate surged to 57 percent in 3Q2024 and 52 percent for 9M2024. This was attributed to additional taxes imposed due to a lower Advances to Deposits Ratio (ADR), which stood at 25.2 percent as of June 2024 – the lowest in the sector. UBL’s stock is currently trading at a 2024 estimated price-to-earnings (PE) ratio of 5.4x, a price-to-book value (PBV) ratio of 1.3x, and offers an attractive dividend yield of 15 percent. With a robust performance in 3Q2024, UBL has solidified its position as a top performer in the banking sector, with strong earnings growth, improved cost efficiency, and a healthy dividend payout.