United Bank : March 2024 Quarterly Report

FOSTERING CONNECTIONS, EMBRACING EMPATHY: OUR COMMITMENT TO CARING RELATIONSHIPS

QUARTERLY REPORT (UN-AUDITED)

MARCH 31, 2024

CONTENTS

Company Information	02
Directors' Report to the Members	03
Unconsolidated Condensed Interim Financial Statements	05
Unconsolidated Condensed Interim Statement of Financial Position	06
Unconsolidated Condensed Interim Profit and Loss Account	07
Unconsolidated Condensed Interim Statement of Comprehensive Income	08
Unconsolidated Condensed Interim Statement of Changes in Equity	09
Unconsolidated Condensed Interim Cash Flow Statement	10
Notes to the Unconsolidated Condensed Interim Financial Statements	11
Consolidated Condensed Interim Financial Statements	46
Consolidated Condensed Interim Statement of Financial Position	47
Consolidated Condensed Interim Profit and Loss Account	48
Consolidated Condensed Interim Statement of Comprehensive Income	49
Consolidated Condensed Interim Statement of Changes in Equity	50
Consolidated Condensed Interim Cash Flow Statement	51
Notes to the Consolidated Condensed Interim Financial Statements	52
Directors' Report to the Members (Urdu)	86

Quarterly Report March 31, 2024		01

COMPANY INFORMATION

Board of Directors
Sir Mohammed Anwar Pervez, OBE, H Pk	Mr. Rizwan Pervez	Mr. Daniel Michael Howlett
Chairman/Non-Executive Director	Non-Executive Director	Independent Director
Lord Zameer M. Choudrey, CBE, SI Pk	Mr. Muhammad Jawaid Iqbal	Mr. Tariq Rashid
Non-Executive Director	President & CEO	Independent Director
The Honourable Haider Zameer Choudrey	Mr. Muhammad Irfan A. Sheikh	Ms. Shazia Syed
Non-Executive Director	Non-Executive Director	Independent Director

COMMITTEES OF THE BOARD		Sir Mohammed Anwar Pervez, OBE, HPk	Member
BOARD AUDIT COMMITTEE (BAC):		The Honourable Haider Zameer Choudrey	Member
Ms. Shazia Syed	Chairperson	Mr. Rizwan Pervez	Member
Mr. Muhammad Irfan A. Sheikh	Member
The Honourable Haider Zameer Choudrey	Member	Mr. Tariq Rashid	Member
Mr. Rizwan Pervez	Member	Ms. Shazia Syed	Member
Mr. Tariq Rashid	Member	Mr. Muhammad Jawaid Iqbal	Member
Mr. Aqeel Ahmed Nasir	Secretary	Mr. Mahboob Avais Saeed	Secretary
BOARD HUMAN RESOURCE & COMPENSATION	Chief Financial Officer
COMMITTEE (HRCC):		Mr. Arif Akmal Saifie
Mr. Tariq Rashid	Chairman	Company Secretary & Chief Legal Counsel
Sir Mohammed Anwar Pervez, OBE, HPk	Member	Mr. Aqeel Ahmed Nasir
Ms. Shazia Syed	Member	Registered Office:
Lord Zameer M. Choudrey, CBE, SI Pk	Member
Ms. Hafsa Abbasy	Secretary	13th Floor, UBL Building, Jinnah Avenue, Blue Area,
BOARD RISK & COMPLIANCE COMMITTEE		Islamabad.
(BRCC):		UBL Head Office
Mr. Daniel Michael Howlett	Chairman	I.I. Chundrigar Road, Karachi - 74000, Pakistan.
Lord Zameer M. Choudrey, CBE, SI Pk	Member	Share Registrar
Mr. Muhammad Irfan A. Sheikh	Member
Mr. Muhammad Jawaid Iqbal	Member	THK Associates (Pvt.) Limited
Mr. Imran Sarwar	Secretary	Plot No. 32-C, Jami Commercial Street - 2
BOARD IT COMMITTEE (BITC):		D.H.A. Phase VII,
	Karachi - 75500.
The Honourable Haider Zameer Choudrey	Chairman	Phone No.: 021-35310187
UAN: 021-111-000-322
Mr. Rizwan Pervez	Member	Fax No.: 021-35310190
Mr. Daniel Michael Howlett	Member	Email: [e-mail]
Mr. Muhammad Irfan A. Sheikh	Member	Auditors
Mr. Muhammad Jawaid Iqbal	Member
Mr. Sohail Aziz	Secretary	M/s. EY Ford Rhodes
BOARD NOMINATION COMMITTEE (BNC):		Chartered Accountants
	Legal Advisors
Sir Mohammed Anwar Pervez, OBE, HPk	Chairman
M/s. Mehmood Abdul Ghani & Co.
Lord Zameer M. Choudrey, CBE, SI Pk	Member	Advocates
The Honourable Haider Zameer Choudrey	Member	Contacts
Mr. Aqeel Ahmed Nasir	Secretary
BOARD INTERNATIONAL COMMITTEE (BIC):	UAN: 111-825-111
Contact Centre: 111-825-888
Lord Zameer M. Choudrey, CBE, SI Pk	Chairman	Website: www.ubldigital.com
Email: [e-mail]
Mr. Daniel Michael Howlett	Member

02 United Bank Limited

DIRECTORS' REPORT TO THE MEMBERS

On behalf of the Board of Directors, we are pleased to present the financial statements of United Bank Limited (UBL) for the quarter ended March 31, 2024.

Performance Overview

On a standalone basis, UBL recorded Profit Before Tax (PBT) of Rs. 30.5 billion for the quarter ended March 31, 2024, representing a 25% year on year growth. Profit After Tax (PAT) stood at Rs. 15.6 billion for Q1'24, compared to Rs. 13.9 billion in Q1'23 with Earnings per share (EPS) of Rs. 12.73 compared to Rs. 11.36 for the corresponding period last year. UBL reported Consolidated PAT of Rs. 16.1 billion (Q1'23: Rs. 14.5 billion) with consolidated EPS of Rs. 13.05 (Q1'23: Rs. 11.62).

The Board of Directors of UBL declared an interim cash dividend of Rs. 11.0 per share in their meeting in Islamabad held on April 17, 2024, along with the results for the quarter ended March 31, 2024.

Net mark-up income stood at Rs. 26.6 billion, while non-mark-up income was recorded at Rs. 20.4 billion in Q1'24, with overall gross revenues at Rs. 47.0 billion for Q1'24, an increase of 12% over Q1'23. Fee-based revenues maintained the overall business momentum throughout the year with a 21% increase over the same period last year. Capital gains of Rs. 12.8 billion were booked on sale of government and foreign securities during the quarter. Domestic current deposits averaged Rs. 965 billion, increasing by 27% year on year, with enhanced focus on network performance.

The Bank's operating expenses recorded a 21% increase over Q1'23 to Rs. 17.6 billion, in line with high inflation levels. Staff costs stood at Rs. 7.5 billion, increasing by 26%, in line with the growth across the branches and hiring mainly within front office functions. Property related expenses were recorded at Rs. 2.4 billion, up 9%.

The Bank recorded a net provision reversal of Rs. 1.7 billion for Q1'24 versus a net provision charge of Rs.

2.6 billion in the same period last year. This included a net provision reversal of Rs. 1.6 billion on loans and advances in Q1'24 (Rs. 1.4 billion provision reversal in Q1'23). Bank level non-performing loans (NPLs) stood at Rs. 106.8 billion at Mar'24, (Dec'23: Rs. 105.5 billion), with specific coverage standing at 87.6% at Mar'24 (Dec'23: 87.5%).

Capital Ratios - Consolidated

UBL seeks to maintain strong levels of capitalization to build resilience and maintain adequate buffers over regulatory requirements. The consolidated CAR stood at 15.2% at Mar'24 (Dec'23: 14.6%), maintaining a buffer of 3.2% over the minimum regulatory requirement of 12.0%. The Common Equity Tier 1 (CET-1) ratio stood at 10.9% at Mar'24 (Dec'23: 10.5%). Total Tier 1 Capital ratio was measured at 11.5% at Mar'24 (Dec'23: 11.1%).

Credit Rating

VIS Credit Rating Company Limited (VIS) re-affirmed the entity ratings of UBL at ''AAA / A-1+" (Triple A / A-One Plus) on June 27, 2023. Moreover, UBL's Additional Tier-1(ADT-1) TFC has also been re-affirmed at 'AA+' (Double A plus). Outlook on the assigned ratings are 'Stable'.

Future Outlook

Being one of the largest financial institutions in the domestic banking space, UBL continues to build its core businesses in 2024, while committing to delivering a strong and consistent return on equity. UBL is focused on further expanding its branch network with an increased emphasis on improving its footprint in all captive markets. We are evolving our digital platforms, as we deliver innovative products and redefine customer experiences. We continue to invest in our transformation agenda with re-alignment of structures

Quarterly Report March 31, 2024		03

and processes to better synergize the organization. We believe the Bank's most valuable asset is its people and the Bank's priority is to retain and acquire the best available talent for UBL to achieve its future growth aspirations.

Acknowledgements

On behalf of the Board of Directors, we would like to express our appreciation to UBL's shareholders and customers for their continued trust in the UBL brand and to the UBL staff for their commitment and dedication. We would also like to extend our gratitude to the Government of Pakistan, the State Bank of Pakistan, the Securities and Exchange Commission of Pakistan and other regulatory bodies for their continuous guidance and support.

Muhammad Jawaid Iqbal	Daniel Michael Howlett
President & CEO	Director
Islamabad,
April 17, 2024

04 United Bank Limited

UNCONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2024

(Un-audited)

Quarterly Report March 31, 2024		05

UNCONSOLIDATED CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION

ASUNCONSOLIDATEDMARCH 31, CONDENSED2024 INTERIM STATEMENT OF FINANCIAL POSITION

AS AT MARCH 31, 2024

	Note	(Un-audited)		(Audited)
		March 31,		December 31,
		2024	2023
ASSETS		------------ (Rupees in '000) ------------
Cash and balances with treasury banks	6	301,352,655		277,330,217
Balances with other banks	7	59,826,293		30,700,751
Lendings to financial institutions	8	7,027,813		34,447,852
Investments	9	4,630,656,100		4,385,216,671
Advances	10	584,903,383		613,565,526
Property and equipment	11	65,957,772		65,087,643
Right-of-use assets	12	8,682,997		8,497,029
Intangible assets	13	2,305,599		2,458,834
Deferred tax assets	14	10,245,272		-
Other assets	15	191,726,295		157,692,979
		5,862,684,179		5,574,997,502
LIABILITIES
Bills payable	17	17,329,269		21,651,784
Borrowings	18	2,979,182,527		2,815,470,554
Deposits and other accounts	19	2,469,099,723		2,350,540,823
Lease liabilities	20	10,559,710		10,339,867
Subordinated debt	21	10,000,000		10,000,000
Deferred tax liabilities	14	-		1,921,889
Other liabilities	22	135,356,902		112,572,054
		5,621,528,131		5,322,496,971
NET ASSETS
	241,156,048	252,500,531
REPRESENTED BY:		12,241,797	12,241,797
Share capital
Reserves		108,045,810	107,800,978
Surplus on revaluation of assets	23	31,201,391	41,965,460
Unappropriated profit		89,667,050	90,492,296
		241,156,048		252,500,531
CONTINGENCIES AND COMMITMENTS	24

The annexed notes 1 to 45 form an integral part of these unconsolidated condensed interim financial statements.

Arif Akmal Saifie	Muhammad Jawaid Iqbal	Shazia Syed	Daniel Michael Howlett	Lord Zameer Mohammed Choudrey,
Chief Financial Ocer	President &	Director	Director	CBE, SI Pk
	Chief Executive Ocer			Director

06 United Bank Limited

UNCONSOLIDATED CONDENSED INTERIM PROFIT AND LOSS ACCOUNT (UN-AUDITED)

FORUNCONSOLIDATEDTHE THREECONDENSEDMONTHSINTERIMENDEDPROFITMARCHAND LOSS31, 2024ACCOUNT (UN-AUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2024

	January -	January -
	March 2024	March 2023
Note	------------- (Rupees in '000) -------------

Mark-up / return / interest earned	26	238,626,523
Mark-up / return / interest expensed	27	212,012,393
Net mark-up / interest income		26,614,130
Non mark-up / interest income
Fee and commission income	28	5,269,354
Dividend income		473,165
Foreign exchange income		2,675,845
(Loss) / income from derivatives		(64,846)
Gain / (loss) on securities - net	29	12,808,746
Net loss on derecognition of financial assets measured at amortised cost	30	(947,561)
Other income	31	181,837
Total non mark-up / interest income		20,396,540
Total income		47,010,670
Non mark-up / interest expenses	32
Operating expenses	17,609,729
Workers' Welfare Fund		668,478
Other charges	33	866
Total non mark-up / interest expenses		18,279,073
Profit before provisions
	28,731,597
Credit loss allowance and write-offs - net	34	(1,719,712)
Profit before taxation
	30,451,309
Taxation	35	14,862,852
Profit after taxation
	15,588,457

89,837,039

56,581,978

33,255,061

4,337,566

475,449

4,346,597

21,494

(639,894)

-

240,189

8,781,401

42,036,462

14,525,160

496,085

1,521

15,022,766

27,013,696

2,614,591

24,399,105

10,496,365

13,902,740

Earnings per share - basic and diluted	36	12.73	11.36

The annexed notes 1 to 45 form an integral part of these unconsolidated condensed interim financial statements.

Arif Akmal Saifie	Muhammad Jawaid Iqbal	Shazia Syed	Daniel Michael Howlett	Lord Zameer Mohammed Choudrey,
Chief Financial Ocer	President &	Director	Director	CBE, SI Pk
	Chief Executive Ocer			Director

Quarterly Report March 31, 2024		07

UNCONSOLIDATED CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOMEUNC NSOLIDATED(UN-AUDITED)CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UN-AUDITED) FOR THETHREEMONTHSMONTHSENDEDENDEDMARCHMARCH31, 202431, 2024

January -	January -
March 2024	March 2023

---------- (Rupees in '000) ----------

Profit after taxation for the period

Other comprehensive income

Items that may be reclassified to profit and loss account in subsequent periods

Effect of translation of net investment in overseas branches

Movement in deficit on revaluation of debt investments through FVOCI - net of tax

Items that will not be reclassified to profit and loss account in subsequent periods

Movement in surplus on revaluation of equity investments through FVOCI - net of tax Movement in surplus on revaluation of property and equipment - net of tax Movement in surplus on revaluation of non-banking assets - net of tax

Total comprehensive income for the period

15,588,457

(1,314,014)

(7,571,483)

(8,885,497)

11,355

5,481

-

16,836

6,719,796

13,902,740

16,828,024

(13,978,786)

2,849,238

-

12,791

-

12,791

16,764,769

The annexed notes 1 to 45 form an integral part of these unconsolidated condensed interim financial statements.

Arif Akmal Saifie	Muhammad Jawaid Iqbal	Shazia Syed	Daniel Michael Howlett	Lord Zameer Mohammed Choudrey,
Chief Financial Ocer	President &	Director	Director	CBE, SI Pk
	Chief Executive Ocer			Director

08 United Bank Limited