United Bank Limited reported earnings per share of PKR 51.42 in CY25, up 56% from PKR 32.89 in CY24. This translates into profit after tax of PKR 128.0 Bn compared to PKR 80.5 Bn in SPLY. The bank declared a dividend of PKR 29.5 per share in CY25, up 34% from PKR 22.0 in CY24.
Total income in CY25 reached PKR 419.6 Bn against PKR 260.9 Bn in CY24, an increase of 61%. This was primarily driven by a 108% increase in net mark-up income from PKR 173.4 Bn in CY24 to PKR 361.6 Bn in CY25. The bank saw its total deposits rise from PKR 2.64 Trn at the end of CY24 to PKR 5.2 Trn at the end of CY25, an increase of 96%. The CASA ratio now stands at 86%. Investments stood at PKR 9.95 Trn at the end of CY25, up 69% from PKR 5.9 Trn at the end of CY24.
Management highlighted that out of its PIB portfolio, PKR 5.9 Trn is in 10-year floating rate instruments with weighted average maturity of 8.5 years which have been bought with an average spread of over 100 bps. Shorter tenor floater PIBs are at a total of PKR 1.0 Trn with a weighted average spread of 50 bps.
The management clarified that their intention is to hold majority of these bonds through till maturity with an expectation that over time deposits will rise, thereby reducing the need for SBP borrowing to hold these positions. The bank’s cost to income ratio for CY25 stood at 31% compared to 36% in CY24 Capital Adequacy Ratio stood at 21.0% at end Dec-25, up from 20.3% at the end of CY24.
Management apprised that a 1% hike in interest rate is expected to have about 40 bps negative impact on CAR ratio. Alongside this, every quarter the NII contribution will also contribute 40 bps to CAR. Therefore, the management is confident of future profitability and ratios remaining compliant. Moving forward, the management believes that it is possible that SBP will hike the rate in its upcoming MPC meeting, however this will depend on the cessation of hostilities in the middle east. With regards to dividends, the management highlighted that they aim to maintain the current payout moving forward.
Important Disclosures
Disclaimer: This report has been prepared by Chase Securities Pakistan (Private) Limited and is provided for information purposes only. Under no circumstances, this is to be used or considered as an offer to sell or solicitation or any offer to buy. While reasonable care has been taken to ensure that the information contained in this report is not untrue or misleading at the time of its publication, Chase Securities makes no representation as to its accuracy or completeness and it should not be relied upon as such. From time to time, Chase Securities and/or any of its officers or directors may, as permitted by applicable laws, have a position, or otherwise be interested in any transaction, in any securities directly or indirectly subject of this report Chase Securities as a firm may have business relationships, including investment banking relationships with the companies referred to in this report This report is provided only for the information of professional advisers who are expected to make their own investment decisions without undue reliance on this report and Chase Securities accepts no responsibility whatsoever for any direct or indirect consequential loss arising from any use of this report or its contents At the same time, it should be noted that investments in capital markets are also subject to market risks This report may not be reproduced, distributed or published by any recipient for any purpose.