Flash Note: United Bank (UBL): 1H2018 Conference Call Notes
- United Bank Limited (UBL) reported earnings of Rs2.8/share in 2Q2018, down by 40% YoY mainly due to Rs2.0bn of additional pension cost.
- The additional pension charge in the quarter takes total pension charge for 1H2018 to Rs8.4bn. The unexpected pension charge this quarter is due to a revised higher estimate of eligible pensioners in light of the initial supreme court ruling. The Bank has filed a review petition to the Supreme Court and the charge may be revised further in coming quarters.
- International provisions of Rs2.4bn have been taken during the quarter and resultantly coverage ratio has reached 71%. The management stated that coverage could be improved further and hence going forward provision charge originating from international NPLs is possible. NPLs against international operations were also up 12.6% from Dec 17 level to US$233mn in Jun 2018.
- The Bank still plans on issuing Tier-I capital. We recall that the Bank had informed that they plan on issuing Tier-I capital worth Rs10bn. CAR of the bank has improved to 16.34% in Jun 2018 vs. 15.45% in Dec 2017 while the Bank also commented that they plan to maintain the current level of dividend.
- Cost to income ratio stood at 47% in 2Q2018, up from 45% in 2Q2017.
- Management believes that effective tax rate for CY18 will be 39%, compared to 44.6% in 1HFY18. Hence, taxation is expected to normalize in the coming quarters.
- As of now, the management does not have an estimate of potential costs from wind down of NY operations.
United Bank is engaged in commercial banking and related services. Co. operates five business segments: Corporate Finance, Trading and Sales, Retail Banking, Commercial Banking and Asset Management. As of Dec 31 2016, Co. operates 1,341 branches inside Pakistan including 47 Islamic Banking branches and 2 branches in Export Processing Zones, and 18 branches outside Pakistan.
Topline Securities is one of the fastest-growing brokerage houses in Pakistan. It has strong Equity Brokerage, Economic/ Equity Research, Commodity Trading and Corporate Finance & Advisory functions.
Topline Securities has been endowed with numerous awards by renowned international financial organizations. The highlights of which consists of the award for ‘Best Local Brokerage House of Pakistan’ by Asiamoney Brokers Poll (the largest Asia-focused equity services provider poll) in 2016 and ‘Best Equity Brokerage House’ by CFA Society Pakistan in 2015.
Previously, Topline Securities held the title for ‘Best Brokerage House’ for 4 consecutive years (2011-2014) by Asiamoney Brokers Poll. Other awards include the ‘Best Salesperson’ award by Asiamoney for 6 consecutive years (2011-2016), the ‘Arabia Fast Growth 500’ award and ‘Pakistan Fast Growth 100’ award in 2012 and 2013 by AllWorld Network.
JCR-VIS, a credit rating agency providing independent rating services in Pakistan has assigned initial rating of “A-2” for short term and “A” for long term to Topline Securities. Topline Securities is registered as Underwriter, Book Runner and Research Entity with Securities & Exchange Commission of Pakistan (SECP).
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.