Financial Statements - United Bank Limited

U N I T E D B A N K L I M I T E D
Directors’ Report to the Members
On behalf of the Board of Directors, I am pleased to present to you the 54 th Annual Report of
United Bank Limited for the year ended December 31, 2012.
Financial Highlights
UBL achieved a profit after tax of Rs 18.0
billion which is 16% higher than last year
and translates into earnings per share of
Rs 14.71 (2011: Rs 12.66). On a
consolidated basis, UBL achieved a profit
after tax of Rs 19.3 billion, an increase of
30% over 2011.
The Board of Directors is pleased to
recommend a final cash dividend of Rs 3.5 per share i.e. 35% and a bonus share issue of Nil for
the year ended December 31, 2012, bringing the total cash dividend for the year 2012 to 85%.
UBL has achieved a pre-tax profit of Rs 27.0 billion which is 12% higher than last year in a
challenging operating environment. This has been achieved despite severe spread compression,
through a growth in the balance sheet, improved non fund income and lower provisions.
The continually declining rate
environment has resulted in yield on
earning assets reducing by 100 bps over
2011. Cost of funds fell by only 13 bps as
the increase in the minimum PLS saving
rate limited rate reduction on deposits.
Consequently, the net interest margin
for 2012 was 87 bps lower than in 2011.
The Bank was able to offset most of this
spread compression through balance
sheet growth, with net interest income declining by 2% to Rs 38.6 billion in 2012.Total
provisions declined by 40% from Rs 7.5 billion in 2011 to Rs 4.5 billion for 2012, while net credit
loss ratio improved from 2.1% to 1.1%.
Non-interest income increased substantially, from Rs 12.7 billion to Rs 17.1 billion, a growth of
35% over last year. Fees and commissions grew by 17% to Rs 8.2 billion, mainly attributable to