KARACHI – UBL continued its growth momentum with Profit Before Tax (PBT) of Rs. 25.9 billion for the half-year ended June 30, 2021, recording strong growth of 37% year on year. This is the highest half-year PBT that the bank has achieved in over a decade. Earnings per share (EPS) were measured at Rs. 12.25 for H1’21 (H1’20: Rs. 9.31).
The bank declared dividends of Rs. 4.0 per share for Q2’21, which takes the overall dividend distribution to Rs. 9.8 billion for the half-year ended June 30, 2021, with a payout of over 65% of profits.
These results have been achieved as the country gradually recovers from the aftermath of COVID 19. Economic activity is gradually picking up largely on the back of large-scale manufacturing, construction, and services sectors. The Bank is optimistic that Pakistan will re-emerge as a stronger nation post the pandemic and the pace of recovery will gather momentum in the medium term.
Customer centricity is at the core of UBL’s corporate philosophy and the bank is continuously improving its service proposition to meet the evolving needs of its customers. The Bank’s priorities are well defined, which aim to invest management time and resources towards:
- Building capacity and enhancing service levels across the branch network.
- More proactive balance sheet management.
- Aggressively growing non-fund income.
- Developing a wider payment system built around UBL’s market-leading digital and technological capabilities.
- Stabilizing the Bank’s business model in international jurisdictions.
Estate Performance – Strengthening the Branch Network, gaining Market Share
UBL maintains one of the largest banking networks in Pakistan. The bank operates 1,348 branches within Pakistan and 1,435 ATMs, well supported by its award-winning Digital App and UBL Omni, the Bank’s branchless banking proposition, which together serve an ever-growing customer base of over 10 million nationwide. Branch Banking Group delivered one of the best years in the recent history of the Bank as domestic current deposits witnessed a year-on-year growth of 22%, the highest in the last 5 years. Domestic total deposits stood at Rs 1.6 trillion with the highest year-on-year growth of over 20%, with expansion in market share to 8.3%. The bank is investing heavily in the network and its people to enhance capacity and improving service benchmarks with an aim to grow well ahead of the market. UBL Ameen, the bank’s Islamic banking business continues to grow from strength to strength. Its network spans 100 branches and 187 Islamic Banking Windows which recorded a 36% year-on-year growth in average deposits, the highest since the inception of the business. The bank sees tremendous potential within this space and is targeting a much larger share in this segment.
Playing a key role within the Intermediation Space
UBL’s net advances stood at Rs. 557 billion as of Jun’21, increasing by 5% since Dec’20. As economic activity gradually returns to pre-pandemic levels, the bank is actively looking to expand its portfolio within its risk parameters. The Bank has recently made structural changes to enhance its coverage within the SME space with an aim to emerge much stronger within this growing segment. The Consumer segment continues to perform well, with average growth in the secured autos segment of 14%.
Non-Funded Income – Growing Revenues across Core Segments
UBL recorded non-fund income (NFI) of Rs. 11.4 billion for H1’21, strong growth of 28% year on year. Fees and commissions of Rs. 6.6 billion were earned during the period, an increase of 26% over H1’20. The bank also realized capital gains of Rs. 2.5 billion during the period, primarily on its foreign bonds portfolio. UBL continues to be the preferred partner to the overseas diaspora as the bank remains the leader in the home remittance space, with a market share of over 20%. This enabled the bank to record remittance commissions of Rs. 840 million, with a 12% growth year on year. The Bank maintained its momentum within the Bancassurance business with revenues increasing by 86% over the previous year. Income from ATM / Debit Cards within domestic banks stood at Rs. 1.1 billion, growing by 64% as ATM throughput volumes increased 23% year on year.
Stabilizing the International Franchise
The Bank is executing its exit strategy from non-core jurisdictions and re-allocating capital, resources, and management time to core markets with higher and more sustainable returns.
UBL has stabilized its international operations in the Middle East and the UK and continues to build a sustainable business model, with strong foundations to support future growth.
UBL Digital – Widely recognized as the Best in the Industry
UBL continues to lead the industry in innovation and providing unique solutions with the aim of improving customer journeys and making banking easier and more accessible to the masses.
The Bank’s digital proposition continues to be acknowledged by the industry. UBL was declared Pakistan’s Best Digital Bank for the second year in a row by Asiamoney, an associate of Euromoney. The Bank was also declared the ‘Best Digital Bank’ at the 2020 Pakistan Banking Awards. UBL was also awarded the “Best Mobile App” and “Best Emerging Technology” awards at the prestigious Pakistan Digital Awards 2021.
The UBL Digital App continues to penetrate the Pakistan market with the number of registered app users at over 1.8 million as of Jun’21. The Bank also enhanced its digital product suite as it launched the first of its kind tap n pay facility, ‘UBL Pay’ as well as the country’s first Islamic Digital Account. UBL also continues to play a leading role in supporting State Bank of Pakistan’s Roshan Digital initiative with close to 36,000 accounts opened to date with mobilization of over USD 153 million in remittances.
Commenting on UBL’s financial performance for the half-year ended June 30, 2021, Mr. Shazad G. Dada, President, and CEO of UBL said “The first half of 2021 has been an outstanding period for UBL in terms of customer acquisition, deposits growth, credit quality, and profitability. This success could not have been possible without the hard work, commitment, and dedication of the talented UBL team.
Being one of the largest financial institutions in the country, UBL prides itself in playing a leading role in broadening the scope of financial services across the country. We will continue to further expand our customer base and offer innovative and best-in-class financial solutions to fulfill the needs of both our customers and our country. Our award-winning digital products demonstrate our industry-leading position in innovation and technology. The UBL team remains focused and will continue to deliver sustainable earnings performance while leading the transition to the future of a ‘Digital Pakistan’.”
