United Bank Limited (PSX: UBL) has delivered an exceptional performance for the half year ended June 30, 2025, with after-tax profits soaring by 106% year-on-year to Rs64.7 billion. This is a significant jump from Rs31.4 billion recorded in the same period of the previous year. The bank’s earnings per share also doubled, increasing to Rs26.07 from Rs12.58, reflecting the strong profitability trend.
A major driver behind this impressive growth has been a substantial increase in net interest income, which surged by 205% to Rs175.4 billion. This rise comes on the back of wider spreads that boosted the bank’s core earnings capability. As a result, UBL’s total income grew by 113% to Rs208.5 billion compared to the first half of last year, underscoring a solid improvement in its primary banking operations.
The bank’s board has approved an interim cash dividend of Rs8 per share, equivalent to 160%, for the second quarter. This takes the total dividend payout for the first half of calendar year 2025 to Rs19 per share or 270%, including the earlier declared Rs11 per share, offering strong returns to shareholders amid rising profitability.
On the non-interest side of the business, UBL faced some headwinds. Total income from fee, foreign exchange dealings, dividend streams and securities dropped by 19% to Rs33.0 billion from Rs40.6 billion a year ago. This decline was largely because last year’s figures were supported by hefty capital gains on investment portfolios which did not repeat this time around.
Still, the bank managed to show resilience within key non-interest segments. Fee and commission income increased by 43%, while foreign exchange income rose by 20%, and securities-related gains surged by a remarkable 330%. These positive contributions helped partially offset the overall decline in non-interest earnings. Other income stood slightly lower at Rs0.5 billion compared to Rs0.6 billion, mostly due to fewer miscellaneous recoveries during the period.
As part of its prudent risk strategy, UBL recorded Rs3.9 billion in credit loss provisions and write-offs, up 60% from Rs2.4 billion in the same period last year. This reflects a careful approach to maintaining the quality of its loan portfolio, particularly in view of broader macroeconomic uncertainties.
On the tax front, the bank’s expense ballooned to Rs85.6 billion, more than triple the Rs28.3 billion it paid last year. This jump primarily stems from the significantly higher taxable profits earned during the period.
Overall, UBL’s strong first half of 2025 results underscore its solid footing in Pakistan’s banking sector. The healthy rise in interest income, coupled with continued growth in core fee businesses, has allowed the bank to deliver substantial returns to shareholders, even as it maintains a cautious stance on credit quality. This robust performance positions UBL well to navigate evolving economic conditions while sustaining its growth trajectory.