United Bank Limited (UBL), one of Pakistan’s leading financial institutions, has announced a historic financial performance for the first quarter of 2025. The bank posted its highest-ever quarterly profit of Rs. 36 billion, translating to earnings per share (EPS) of Rs. 28.9. This marks a significant 126% year-on-year (YoY) increase and a 39% rise compared to the previous quarter (QoQ), setting a new benchmark not only for the bank itself but also across the entire banking sector.
The Q1 2025 earnings have far exceeded market expectations, which were estimated in the range of Rs. 12.8 to Rs. 22.9 per share. Analysts across the industry were surprised by the magnitude of this performance, as UBL now holds the record for the highest profit ever reported by any bank in Pakistan in a single quarter.
A key driver behind this exceptional performance is the substantial growth in the bank’s Net Interest Income (NII). According to Topline Securities, NII reached Rs. 84 billion in Q1 2025—an increase of 24% QoQ and a staggering 200% YoY. This remarkable rise is attributed to a surge in current account deposits and favorable returns on investments, especially Open Market Operation (OMO) borrowings. The bank’s well-timed investment strategy, coupled with a lower cost of borrowing, significantly contributed to its bottom line.
In addition to the rise in NII, UBL also benefited from a provision reversal of Rs. 1.6 billion during Q1 2025. While this is slightly lower than the Rs. 1.7 billion reversal reported in Q1 2024, it marks a notable turnaround from the Rs. 14.2 billion provision expense recorded in the previous quarter (Q4 2024).
However, not all segments of UBL’s income portfolio performed equally well. The bank’s Non-Interest Income witnessed a decline, falling by 21% YoY and 38% QoQ to Rs. 16.8 billion in the first quarter of 2025. This decline was largely driven by a significant drop in gains on securities, which fell by 55% YoY and 69% QoQ to Rs. 5.8 billion. Despite this downturn, UBL reported strong performance in its fee and commission income, which rose by 26% YoY and an impressive 90% QoQ, reaching Rs. 7.5 billion.
The bank’s effective tax rate for the quarter stood at 53%, which came as a surprise to many industry observers who had anticipated a lower rate due to the ongoing merger process with SILK Bank. The higher-than-expected tax rate slightly tempered the overall profitability but did not overshadow the record-breaking earnings.
UBL’s Q1 2025 performance cements its position as a frontrunner in the banking industry, reflecting not only strategic foresight but also resilience in a complex economic environment. With robust interest income, timely asset deployment, and strategic deposit mobilization, UBL has showcased a model of financial strength and agility, setting a high standard for its peers moving forward.