United Bank Limited (UBL) achieved a profit after tax of Rs15.5 billion for 2011, which is 39 per cent higher than last year, the bank said Wednesday. This translates into earnings per share of Rs12.66 (2010: Rs9.12). Board of directors also approved a final cash dividend of 60 per cent, which means Rs6.00 per share, bringing the total cash dividend for the year 2011 to 75 per cent or Rs7.5 per share. Despite testing times, UBL has achieved a profit before tax of Rs24.2 billion. This is 37 per cent higher than last year as a result of continued improvement in operating efficiency and margins. Provisions for the year declined for a second consecutive year as a result of the bank’s prudent approach towards extending financing given the difficult credit environment whilst NPL formation has also reduced year-on-year. Net interest income before provisions increased to Rs39.4 billion, 15 per cent higher than last year. Despite a 200bps reduction in the discount rate in the latter half of the year, the average yield on earning assets improved by 55bps whilst the cost of funds growth was contained at 35bps, as a result net interest margin increased to 7.0 per cent in 2010 to 7.2 per cent in 2011. Total provisions declined by 7 per cent to Rs7.5 billion for 2011, with nearly 75 per cent being due to aging of existing non-performing accounts. Consequently, coverage improved from 72 per cent to 80 per cent by December 2011. As a result, net credit loss ratio improved from 2.3 per cent in 2010 to 2.1 per cent in 2011. Net interest income after provisions is therefore, up 22 per cent to Rs32.1 billion. Fees and commissions generated from core banking businesses increased by 10 per cent to Rs6.9 billion mainly attributable to increase in remittances, FI commissions and cross-sell of bank assurance. Exchange income increased by 26 per cent to Rs2.1 billion as a result of higher transaction volumes and better leveraging of market opportunities.
UBL announces Rs6 per share dividend
