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United Bank Ltd: 4 directors
A director at United Bank Ltd bought 3,307 shares at 313.000PKR and the significance rating of the trade was 34/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clear...
Moody's Ratings upgrades five Pakistani banks and changes outlook to p...
Moody's Ratings (Moody's) has today upgraded the long-term deposit ratings to Caa2 from Caa3 of five Pakistani banks: Allied Bank Limited (ABL), Habib Bank Ltd. (HBL), MCB Bank Limited (MCB), National Bank of Pakistan (NBP) and United Bank Ltd. (UBL). We have also upgraded ABL, HBL, MCB and UBL's ...
- Yusra Beg
United Bank: Laser-sharp focus on profitability and payouts
* The signing of the IMF SBA programme has improved prospects for Pakistan’s economy, with the banking sector being the best performing at the Index in July. UBL has led the pack on a laser-sharp focus on profitability and excellent dividend yield. * We raise CY23-27f EPS estimates for UBL by 13% on average, on strong margin expansion and asset quality. We also incorporate an ultra-high cash payout ratio for the next 1-2yrs (c 100% payout in CY23f), with capital ratios appearing adequat...
- Yusra Beg
United Bank: 2QCY23 Result Review: Another stellar payout
UBL has posted consolidated 2QCY23 NPAT of PKR12.7bn (EPS: PKR10.39), up a massive 4.8x YoY and 11% QoQ. This takes 1HCY23 NPAT to PKR27.5bn (EPS: PKR22.01), up 2.3x YoY. The result is higher than our projected 2Q EPS of PKR9.50, with the deviation primarily stemming from a deferred tax reversal which reduced the overall effective tax rate. UBL also announced a higher than expected dividend of PKR11.0/sh vs. our estimate of PKR10.0/sh, translating into a 106% payout. 2QCY23 RESULTS HIGHLIGHTS...
- Yusra Beg
Pakistan Banks – 2QCY23 Result Previews - Strong core performance to c...
* Pre-tax 2QCY23 profits for the IMS Banking Universe are expected to rise 10%QoQ, reflecting strong core performance. However, net earnings may come off by 15%QoQ due to retrospective impact of super tax (10% vs. 4% previously). Payouts should remain broadly intact. * Domestic asset quality has remained resilient, which should keep the cost of risk in check. Impairment, if any, should also be contained compared to the last few quarters. We expect MEBL to stand out due to the lagged ass...
- Yusra Beg
Pakistan Banks: Returning conviction
* With the IMF staff-level agreement in place, the much needed breathing space for Pakistan's economy reinforces our liking for the banking sector. The absence of banks from debt restructuring in Zambia and Sri Lanka also provides comfort if this conversation crops up again in Pakistan next year. * 1QCY23 results indicate underlying profitability is strong, on rising margins and resilient asset quality. Our 2023-27f earnings estimates remain broadly unchanged, even as we conservatively ...
- Yusra Beg
United Bank: 1QCY23 Result Review - Dividend payout steals the show
UBL has posted consolidated 1QCY23 NPAT of PKR14.2bn (EPS: PKR11.62), up 53% YoY and 9% QoQ. The result is significantly above our projected EPS of PKR10.15, with the deviation stemming from very high Fx gains (other line items are broadly in line). Results were accompanied with a record-high interim dividend of PKR11.0/sh vs. our estimate of PKR6.0/sh. 1QCY23 RESULTS HIGHLIGHTS: * UBL has reported NII of PKR34.9bn, up 10% QoQ and 56% YoY – inline with estimates. This is a function of both m...
- Yusra Beg
Banks – 1QCY23 Result Previews - Earnings momentum to accelerate
* We expect the IMS Banking Universe to lift by 54% YoY and 20% QoQ in 1QCY23f, as we incorporate strong pickup in NII, a lower impairment charge on overseas bonds (for those banks that have already booked it in CY22), and a lower effective tax rate (43%). This should more than offset rising admin expenses and any untoward increase in loan provisions. * The higher interest rate environment will drive up margins while balance sheet growth remains strong. BAFL may stand out in terms of se...
- Yusra Beg
United Bank: Narrower focus on core operations
We have raised our CY23-26f EPS estimates for UBL by 11% on average, with margin-led revenue growth more than offsetting a higher cost of risk and tail-end charges on sovereign bonds. Our new TP stands at PKR155/sh vs. PKR150/sh previously, offering a 1yr total return of 69%. Despite no NPL formation as yet, Pakistan’s distressed macroeconomic profile leads us to maintain an elevated cost of risk (100bps/90bps in CY23/24f). Major ECL charges on sovereign bonds are already behind us. NIMs are ...
- Yusra Beg
United Bank: 4QCY22 Review - One-offs and strong core deliver record p...
UBL has posted record-high consolidated 4QCY22 NPAT of PKR13.1bn (EPS: PKR10.67), up 51% YoY and 2.0x QoQ. This brings CY22 NPAT to PKR31.5bn (EPS: PKR25.76), up 4% YoY. The result is significantly above our projected 4Q EPS of PKR7.30, with the deviation stemming from a large gain on disposal of UBL’s Swiss subsidiary. This fx gain has helped offset a large provisioning charge, which we understand pertains to overseas bonds. Results were accompanied with a final cash dividend of PKR9.0/sh – ...
- Yusra Beg
Pakistan Banks: 4QCY22 Result Previews - NII growth may be negated by ...
We estimate the IMS Banking Universe to report flat sequential earnings in 4QCY22 (up 19% YoY), as we incorporate significantly lower Fx income, sticky total provisions and higher admin expenses. These factors should offset sequentially higher NII. UBL may stand out in terms of sequential profit growth, given its low base (one-off impairment in the previous quarter). In general, there is room for minor negative surprises on payouts across our coverage, with mark-to-market bond repricing pushi...
- Yusra Beg
United Bank: 3QCY22 Result Review - Bonds drive high total provisions
UBL has posted consolidated 3QCY22 NPAT of PKR6.5bn (EPS: PKR5.32), down 4% YoY but higher by 2.5x QoQ – although from a very low earnings base in 2Q. This brings 9MCY22 NPAT to PKR18.5bn (EPS: PKR15.09), down 15% YoY. The result is significantly below our projected EPS of PKR7.20, with the deviation primarily stemming from a high provisioning expense charge of PKR5.5bn (largely on account of impairment on international GoP bonds). Results were accompanied with an interim cash dividend of PKR...
- Yusra Beg
Pakistan Banks: 3QCY22 Result Preview - Earnings trajectory is intact
* We estimate the IMS Banking Universe to report a 21% YoY and 95% QoQ rise in earnings in 3QCY22 as we incorporate a lower taxation charge (52% average effective tax rate) vs. 75% in the previous quarter. Banks with Gross ADR above 50% will again stand out. * We expect margin expansion to continue, assets continue to reprice, while strong balance sheet growth continues. Credit costs are likely to remain soft but Fx gains may moderate sequentially. * Our covered banks have shed c.2...
- Yusra Beg
Pakistan Banks: Tough 2022 but the outlook is better
* Pakistan banks have had a tough 2022, with the economy experiencing significant stress amidst unhelpful politics. Fiscal needs also compelled the government to heavily tax banks, which sharply clipped profitability. The sector has underperformed the KSE100 this year. * The outlook is better. Margins are rising and are expected to be downward sticky. Asset quality is resilient, even with the floods, and while the regulatory climate is tighter, it is in the price. The recently resumed I...
- Yusra Beg
United Bank: 2QCY22 Result Review: CAR buffers lead to payout surprise
UBL has posted consolidated 2QCY22 NPAT of PKR2.65bn (EPS: PKR2.17), down 64%YoY. This brings 1HCY22 NPAT to PKR11.96bn (EPS: PKR9.77), down 20%YoY. The 2Q result was below our projected EPS of PKR3.20, but the deviation is due to high effective taxation of 85% vs. our projected 78%. Pre-tax earnings are above estimates, and so is the 2nd interim dividend of PKR4.0/sh vs. our expected PKR2.50/sh dividend. 2QCY22 RESULTS HIGHLIGHTS: Net interest income is up a strong 31%YoY / 10%MoM to PKR24.7...
- Yusra Beg
Pakistan Banks – 2QCY22 Previews - Hit hard by tax
* The banking sector is expected to post sharply lower earnings in 2QCY22, on high taxation post the changes introduced in the FY23 Budget. For our coverage, we expect the effective tax rate to come in at an average of 70% in 2Q, driven up by MCB, UBL and HBL. This can affect their accompanied cash payouts. Banks meeting the 50% Gross ADR threshold, such as MEBL, BAFL and BAHL, should be relatively protected. * The higher interest rate environment will drive up margins while balance she...
- Raza Jafri
- Yusra Beg
United Bank: Earnings momentum to unlock rerating
We broadly maintain our EPS estimates for UBL but raise our Dec’22 TP to PKR170/sh, from PKR165/sh previously, where the strong earnings beat in 1QCY22 (EPS: PKR7.60; DPS: PKR5.0) is highly encouraging. UBL offers earnings growth north of 15%yoy in each of CY22/23f, together with an exceptional D/Y of 14.6%. Mid-cycle ROE is projected at 17%, much improved compared to the previous 5yr average of 12%. With legacy asset quality issues in the GCC firmly in the past, UBL’s delivery of normalized ...
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