By: WE Financial Services Limited
In today’s morning briefing we would discuss the performance of United Bank Limited (UBL) in 1HCY15 and would give recommendation on the scrip.
PAT hikes 21% YoY in 1HCY15: On back of impressive hike in non-interest income and higher net interest income, the profit after taxation (PAT) of UBL managed to post a positive growth of 5.1% YoY in 2QCY15 to Rs 5,595 million (EPS: Rs 4.57) versus a PAT of Rs 5,323 million (EPS: Rs 4.35) in 2QCY14. The profitability of the company however was affected by higher provisions and imposition of one-time super tax of 4% and 35% uniform tax on dividend income and capital gain. As a result of higher taxation, the effective taxation of the bank hike to 50.1% in 2QCY15 versus 33.4% in 2QCY14. Cumulative PAT surge by 21% to Rs 12,722 million (EPS: Rs 10.39) in 1HCY15 versus Rs 10,532 million (EPS: Rs 8.60) in 1HCY14.The corporate results were accompanied with a second interim cash dividend of Rs3/share taking the total cash dividend to Rs6/share so far CY15.
Negative QoQ growth: On QoQ basis however the bottom-line of the company posted a negative growth of 21.5% to Rs 5,595 million (EPS: Rs 4.57) in 2QCY15 versus Rs 7,127 million (EPS: Rs 5.82) in 1QCY15. This decline in earning is attributed to higher provisions and imposition of super tax and uniform tax on dividend income and capital gain.