Islamabad: United Bank Limited (UBL) disclosed its financial outcomes for the second quarter of 2024 today, presenting a net profit after tax (NPAT) of PKR 15.27 billion, with an earnings per share (EPS) of PKR 12.1. The results reflect a 7% decline from the previous quarter but a 17% increase year-over-year. The bank also maintained its robust dividend policy, announcing a payout of PKR 11 per share for the quarter.

According to AKD Securities Limited, UBL’s net interest margins (NIMs) remained stable at approximately 2.07% in 2QCY24, marginally up from 2.05% in the previous quarter. The slight increase in net interest income (NII), up by 4% quarter-over-quarter, was attributed to a significant rise in investment volumes. Notably, the banking industry’s investments surged by 15% quarter-over-quarter and 44% year-over-year, pushing the industry investment to deposit ratio (IDR) to 97% from 82% in the same period last year.

Despite a 38% quarter-over-quarter increase in foreign exchange income, which totaled PKR 3.8 billion, the bank’s non-interest income faced a 9% decline, primarily due to a 28% drop in capital gains on securities. Year-over-year, however, non-interest income saw a substantial increase, multiplying by 5.3 times.

Provision reversals this quarter were PKR 644 million, showing a 63% decrease from the previous quarter and a 73% drop year-over-year, indicating a continued trend of reversing provisions previously set aside for advances and investments during 2022 and 2023.

The effective tax rate for the quarter was slightly reduced to 47.5%, compared to 48% and 52% in the first quarter of 2024 and the same period last year, respectively. The bank has also continued its consistent dividend policy, marking the sixth consecutive quarter of a PKR 11 per share dividend, which corresponds to a payout ratio of about 91%.