UBL’s 1Q profit down 63.5pc

KARACHI: United Bank Limited (UBL) on Wednesday announced its net profit declined 63.5 percent in its first quarter ended March 31, 2018, owing to one-time pension payment.

The bank in a bourse filing said its net profit fell down to Rs2.646 billion, from Rs 7.255 billion reported in the first quarter last year.

The bank also gave out an interim dividend of Rs3/share or 30 percent to existing shareholders.

An analyst from Sherman Securities said the bank’s earnings took a major hit after it booked a pension expense of Rs6.4 billion during the quarter. “This is higher than our estimates as the management … had indicated a pension cost in the range of Rs 3.4 billion to Rs 5.9 billion,” the analyst added.

The bank said its net interest income for the period rose 1 percent to Rs13.854 billion, compared to Rs13.712 billion the previous year.

The bank reported earnings-per-share of Rs 2.16/share, compared with Rs5.93/share in the same period last year.

The analyst further said one-off expenses in shape of payment for pension eroded the profit, which would be carried throughout the year.

“Any increase in fee, commission, brokerage income, and gain on sales of securities would help offset some of the earnings by end year,” the analyst added.

The bank’s earnings through fee, commission, and brokerage income rose 5.7 percent to Rs 2.946 billion in the first quarter of 2018 compared to Rs2.786 billion posted for the same period last year.

Moreover, gain on sale of securities also climbed by 31 percent to Rs3.067 billion during the first quarter compared to Rs2.340 billion a year back.