United Bank Limited (UBL) reported strong earnings of Rs4.2 billion in third quarter of this calendar year with earning per share of Rs3.47, up 24 per cent Quarter-on-Quarter basis; taking cumulative 9M profits to Rs11 with earning per share of Rs8.95, up by an impressive 36 per cent, year-on-year basis. The notable 24 per cent Q-on-Q jump in profitability came on the back of NIM expansion of 30bps QoQ to 7.3 per cent and a six per cent QoQ growth in the non-funded income.
On the balance sheet front, bank’s deposit base witnessed a slight decline of six per cent on QoQ basis to Rs557 billion. Similarly, earning assets (investments plus advances) too declined by two per cent QoQ. Post this impressive result, we have revised up our 2011 earnings estimates to Rs11.9 from Rs10.7 per share previously and maintain our ‘Buy’ call on the stock.