Islamabad, Oct 23; Today, United Bank (UBL) revealed its 3Q2024 results, showing earnings of Rs. 18.3 billion (EPS of Rs. 14.96), a 24% YoY and QoQ increase.
Topline Securities claims that this is the bank’s highest-ever quarterly profit.
This brings 9M2024 earnings up 18% YoY to Rs. 40.12/share. In addition to the outcome, the bank declared a third interim cash dividend of Rs. 11 per share, increasing the payout for 9M2024 to Rs. 33 per share.
For the third quarter of 2024, Net Interest Income (NII) was Rs. 52 billion, up 30% year over year and 77% quarter over quarter. Higher asset yields, a favorable asset repricing gap, and a positive yield on repo borrowings are the primary drivers of this robust rise.
Gains on securities, which totaled Rs. 5.9 billion in 3Q2024 compared to Rs. 284 million in 3Q2024, were the main driver of the bank’s 102 percent YoY increase in non-interest income to Rs. 16 billion in 3Q2024. In the third quarter of 2024, UBL’s fees and commission income increased by 32% year over year, while its foreign exchange income increased by 49% year over year.
The sale of its subsidiary, United National Bank Limited (UNBL UK), was the main reason for UBL’s Rs. 7.3 billion gains in its unconsolidated accounts for the third quarter of 2024.
In contrast to a reversal of Rs. 664 million in 2Q2024 and Rs. 993 million in 3Q2023, UBL reported a provision expense of Rs. 894 million in 3Q2024.
Due to an expanding branch network and inflationary pressures, operating expenses increased by 18 percent QoQ and 26 percent YoY.
Compared to 40 percent in 3Q2023 and 42 percent in 2Q2024, UBL’s cost-to-income ratio improved to 35 percent in 3Q2024.
In 3Q2024 and 9M2024, the bank’s effective tax rate was 57% and 52%, respectively. This shows that the bank has recorded more taxes as a result of the reduced ADR. Recall that as of June 2024, UBL had the lowest gross ADR in the industry at 25.2%.
At the moment, the UBL stock is selling at a PBV ratio of 1.3x, a dividend yield of 15%, and a 2024E PE ratio of 5.4x.
