F.P. Report
KARACHI: UBL declared Profit Before Tax (PBT) of Rs.15.8 billion for the quarter ended March 31, 2022, which represents an increase of 30% in the bottom line. Earnings per Share (EPS) was measured at Rs.7.78 (Q1’21: Rs.6.05). The Bank maintained the healthy payouts to its shareholders with the first dividend of the year declared at Rs.5.0 per share. UBL’s capital base remains strong as the Capital Adequacy Ratio (CAR) stood at 21.7% as at Mar’22, an excess of 9.2% over regulatory minimum requirements.
UBL records 25% growth in the revenue top line
The Bank’s gross revenues stood at Rs.28.3 billion, growing by 25%, driven by the buildup in the deposit base over last year, healthy loan growth and well positioned investment portfolio. Non-markup income was recorded at Rs.6.8 billion for Q1’22, up 17% as all major fee based revenues depicted a solid pick up in business with strong growth in foreign exchange flows. The cost to income ratio further improved to 42% from 44% last year. Provisioning expense remained controlled with enhanced risk vigilance and strong focus on recoveries across both domestic and international.
One of the largest branch networks in Pakistan serving a customer base of over 10 million
UBL remains one of largest private banks in Pakistan with a branch network of 1,340 branches spread across both urban and rural geographies and 1,439 ATMs across the country. The physical network is well supported by the industry’s leading Digital Banking services and our branchless banking proposition UBL Omni which serves even in the remotest locations across Pakistan. Our strength is an increasing and diverse customer base nationwide, as we continue to build on our agenda of financial inclusion and providing access to finance across all segments of society. Domestic deposits averaged Rs.1.5 trillion for Q1’22, with strong growth of 11% in current accounts and a very profitable CASA ratio of 88%. The Bank continues to expand its customer base, particularly within current deposits, as it on-boarded 162,000 new current account relationships in the first quarter.
UBL remains an active participant in all the major economic initiatives of the Government of Pakistan and the State Bank of Pakistan (SBP). We are one of the key partners in the SBP’s Roshan Digital initiative, having opened over 78,000 accounts, with inflows of over USD 532 million. The Bank continues to play its role in the “Mera Pakistan Mera Ghar” initiative, with disbursements of Rs.3.5 billion. Furthermore, we are at the forefront of the Kamyab Jawab program, with disbursements over Rs.2.5 billion, supporting the needs of upcoming young entrepreneurs all across Pakistan.
Digital Banking – Best in class serving over 2 million customers
The Bank’s award winning and industry leading digital services envision a better service proposition for all banking customers, with ease and convenience never seen before in the financial sector. The key pillars of the Bank’s digital strategy is to create a consistent experience across all touchpoints and to add enabling platforms over time. We seek to evolve with the ever changing requirements and expectations of our customers as we scale into a wider payments ecosystem. Our payments throughput from ‘UBL Digital’, our mobile app, were recorded at Rs.1.7 trillion last year, and with a growing customer base, we have already crossed Rs.531 billion in Q1’22, a growth of 56%. These volumes clearly indicate the future business potential through digital penetration, being one of the largest banks in Pakistan. We are seeking to redefine the financial landscape with our futuristic mindset, innovative ideas and well directed capital allocation towards new technologies.
Non Fund Income records growth of 17% – strong momentum across all major avenues
The Bank’s Non-Fund Income (NFI) was reported at Rs.6.8 billion for Q1’22, contributing 24% to total gross revenues. Fee revenues of Rs.3.9 billion were earned in Q1’22, with an increase of 29%, as strong momentum was witnessed across all major businesses. The Bank remains the preferred partner to overseas Pakistanis who continue to place their trust in UBL. As a result, the Bank recorded a market share of over 21% within the home remittances space with commission income of Rs.448 million earned in Q1’22. The Bank also maintained its market presence within the bancassurance business as commission income was recorded at Rs.479 million in Q1’22, with strong growth of 26%.
UBL Ameen – Islamic business scaling up well with wider footprint in target markets
Islamic banking remains a key priority and UBL continues to expand within this fast growing segment. UBL Ameen’s branch network stands at 145 branches and is further supported by 197 Islamic Banking Windows (IBWs) within commercial branches. UBL Ameen’s deposit base closed at Rs.158 billion at Mar’22, growing by 13% over Dec’21. Islamic advances continue to grow as the loan book stood at Rs.67 billion at Mar’22, an increase of 52% over Dec’21.
Loan book records 17% growth with improvement in credit quality
UBL continues to grow in its intermediation role within the economy, as performing advances averaged Rs.629 billion in Q1’22, a strong growth of 17%. The Bank is actively working on creating a wider eco system to support its corporate client base and expanding its reach within the SME and rural banking segments. This includes leveraging our digital capabilities to offer customised products and becoming a technology partner in the future to our customers. Deepening relationships with ancillary services are improving customer yields, as evident in the 17% growth in income from trade and 14% growth in earnings from cash management.
Commenting on the results, Shazad G. Dada, President & CEO of UBL said: “UBL had the most profitable year in its history in 2021 and we continue to deliver even stronger growth in 2022, a year for which we have very high ambitions. We remain Pakistan’s most innovative Bank bringing new customer centric products and services to our valued customer base of over 10 million. Urooj account, is our latest product exclusively catering to the needs of women in Pakistan. Branch Banking remains the engine for sustainable growth for UBL, growing its deposits in each region across the country. We believe that the future banking landscape is ‘phygital’ – a combination of a well penetrated branch footprint supported by the power of digital banking making customer journeys effortless and convenient. Customers are at the heart of everything we do and we are excited about the new and innovative solutions which we will continue to bring to the market in the future. We are committed to delivering sustainable growth with a strong culture of controls and governance. Our people remain our greatest strength, we value their contribution and shall continue to invest in their development as we set even higher aspirations for the franchise in the years to come.”
