KARACHI: United Bank Limited (UBL) has announced its calendar year 2025 (CY25) financial results, posting its highest-ever annual profit of Rs. 130 billion, translating into earnings per share (EPS) of Rs. 51.9, reflecting a robust 73 percent year-on-year (YoY) growth.
On a quarterly basis, the bank reported a profit of Rs. 29.9 billion (EPS: Rs. 11.95), up 17 percent YoY but down 15 percent quarter-on-quarter (QoQ).
The bank declared its highest-ever annual cash dividend of Rs. 29.5 per share for CY25, compared to Rs. 22 per share in CY24.
According to Arif Habib Limited (AHL), the strong earnings growth was primarily driven by a sharp increase in net interest income (NII), coupled with provisioning reversals recorded during the year.
UBL’s NII surged to Rs. 362 billion in CY25, marking an impressive 108 percent YoY increase. The growth was supported by higher interest income and a decline in interest expenses. Interest income stood at Rs. 1.2 trillion, up 9 percent YoY, while interest expense declined 10 percent YoY to Rs. 823 billion.
Non-funded income, however, declined 25 percent YoY to Rs. 62.7 billion, mainly due to a significant drop in gains on the sale of securities, which fell 78 percent YoY to Rs. 9.9 billion. Despite this, fee income rose sharply by 48 percent YoY to Rs. 32 billion, foreign exchange income increased 43 percent YoY to Rs. 18 billion, and dividend income grew 34 percent YoY to Rs. 2.3 billion.
On the provisioning front, the bank recorded a reversal of Rs. 4.7 billion in CY25, compared to a provisioning expense of Rs. 12.7 billion in CY24, further supporting profitability.
Operating expenses increased 38 percent YoY to Rs. 139 billion. Nevertheless, strong income growth improved operational efficiency, with the cost-to-income ratio declining to 32.7 percent in CY25 from 39 percent in the previous year. The effective tax rate rose to 55 percent, compared to 48 percent in CY24.
On the balance sheet side, deposits crossed the Rs. 5 trillion mark for the first time, reaching a record level and registering exceptional growth of 96 percent YoY. Investments also surged to an all-time high of Rs. 9.9 trillion, up 69 percent YoY, while advances declined 5 percent YoY to Rs. 1.4 trillion.
At the last closing day price (LDCP), the stock is currently trading at a price-to-book multiple of 3x and offers a dividend yield of 6.6 percent for CY26E.
