United Bank Limited posted profit after tax of Rs 15.85 billion (EPS: Rs 12.95) in 9MCY14 compared to Rs 12.93 billion (EPS: Rs 10.57) in 9MCY13, an increase of 22.5% mainly due to 17.5% surge net interest income (NII) , provisions decline by 42.2% and 10% swell in noninterest income. In 3QCY14, bank reported net profit of Rs 5.32 billion (EPS: Rs 4.35) in 3QCY14 against Rs 4.66 billion (EPS: Rs 3.81) in 3QCY13, up by 14% YoY. This is emanated due to 15.3% YoY rise in net interest income and reversal of provisions. Moreover, company also announced cash payout of Rs 2.50/share, taking the total cash dividend of Rs 7.50/share for 9MCY14 against Rs 6/share for 9MCY13.

NII provided key support
Interest income hike by 13% to Rs 60.39 against Rs 53.43 billion in 9MCY13 mainly due to rise in earnings assets and investments in PIBs. On the contrary, Interest expense too increase by 8.4% to Rs 28.25 billion in 9MCY14 against Rs 26.07 billion in 9MCY13 owing to
increase in saving rate. However, 20% growth in average current accounts has enabled to contain the increase in the domestic cost of funds. Net interest income (NII) surge by 17.5% to Rs 32.13 billion versus Rs 27.36 billion in 9MCY13 due to growth in the loan book and higher yields on PIBs.

Azee Research