Karachi: United Bank Limited (UBL) has taken a lead among all banks of the country in announcing the result with handsome earnings as it profits registered a 39 percent record growth in the first half of 2012 year-on-year.
The leading bank made earnings of Rs9.3 billion in 1H of 2012 as against Rs 6.7 billion in the same period of 2011.
In second quarter alone, the bank reported a 30%YoY jump with profits of Rs4.5 billion and it announced a second interim cash dividend of Rs2.0 per share, taking the cumulative dividend to Rs3.0 per share.
Despite a decline of 1%YoY in net interest income due to lower spreads, fall in provisions and a 30%YoY increase in non interest income (higher dividend and fee income) helped the bank report an overall growth in the bottom line.
Though net interest income (NII) remained almost flat at Rs19.2bn, 26% jump in non interest income to Rs25.6bn and lower provisioning (down 74% to Rs1.3bn) mainly contributed to earnings growth of 38%.
Despite additional flows, NII remained flat due to lower spreads on account of decline in interest rates and increase in minimum deposit rates.
On the other hand, better dividend income from treasury/trading related led overall growth in non –interest income.
Moreover, controlled lending along with improved paying capacity of borrowers after decline in interest rates led overall provisioning to decline from Rs4.9 billion to Rs1.3 billion.