UBL profit up by 87 percent in 2002: first annual report after privatisation

KARACHI (March 12 2003) : United Bank Limited pre-tax profit in 2002 jumped by 87 percent, touching Rs 2.8 billion as against Rs 1.5 billion in 2001.

UBL President Amar Zafar Khan, presenting the 44th Annual Report to the board of directors (first since the bank's privatisation), said that the operating profits before provisions and write-offs increased by 11 percent to Rs 3.6 billion from Rs 3.2 billion last year, whereas the profit before tax and extraordinary items increased by 87 percent as compared to the last year.

This was mainly attributed to 14 percent increase in net revenue from funds, 10 percent increase in fee and brokerage income and 41 percent reduction in write-offs/provisions for non-performing assets as compared to the last year. Profit after taxation was Rs 1.41 billion.

Zafar Khan said that low cost deposits recorded a growth of Rs 12.4 billion (15 percent), whereas expensive deposits increased by Rs 7.6 billion (12 percent) as compared to the last year.

Performing advances increased by Rs 2 billion as compared to the last year. Net non-performing advances decreased by 53 percent. And, there was a 17 percent increase in trade-related business with the bank handling import and export business worth Rs 135 billion.

In 2002, UBL launched three new products, namely, United Money Market Fund, which was described by the Securities and Exchange Commission of Pakistan (SECP) as the most professionally structured fund of international standard ever offered to the investors in Pakistan; Web/Internet-based account enquiry service – UB on Line – for UBL customers 24 hours (with further enhancement under way enabling the customers to transfer, pay utility bills and make investment from their own homes and offices using the PC or mobile phones), and introduction of Uni Remote – inter-branch banking at all activated hubs comprising 200 branches countrywide.

UBL – home remittance business volume has trebled since last year with Tez Raftar 24 hour delivery mechanism and the bank has also launched Master Credit Card for its customers in the Gulf with round-the-clock support centre.

UBL clinched a significant amount of major deals in 2002, which included.

— Joint Lead Managed – for Major Customer Issuance of Term Finance Certificates (TFCs) of Rs 15,080 million. The largest ever TFC issue in Pakistan.

— Developed Listed Asset Backed Securitisation of the future receivables for Mobile Phone Co worth Rs 986 million – first ever deal of its kind in Pakistan.

— For National Flag Carrier purchase of Boeing 777, advised and arranged long-term financing of Rs 8,700 million.

— For a major textile group, advised & arranged the issuance of TFCs of Rs 986 million – the largest TFC issue in the textile sector.

— For a major national corporate, advised and arranged a five-year syndicated offshore Morabaha financing worth Rs 4,060 million.

In 2003 the bank is aiming to:

— Invest a substantial amount in technology, premises improvements, and infrastructure to improve customer service.

— Launch ATM service.

— Renovate hubs across the country.

— Automate further 300 spokes (208 already automated) at estimated 200 branches where customers can carry out inter-branch transactions through the network.

— Greater focus on consumer, small business and agricultural lending.

— Hire highly experienced people at key senior level positions – to further strengthen the management team.

— Improve compensation and training, and accountability for staff in order to improve motivation, productivity and customer service.

In 2002 the branch network was further rationalised through the closure of marginal and loss making branches, decreasing the total from 1,117 to 1,112.

On October 19, 2002 the Government of Pakistan sold 51 percent of their shareholding to a consortium of Abu Dhabi Group (UAE) and Bestway Group (UK).

His Highness Shaikh Nahayan Mubarak al-Nahayan is now the Chairman of the Board of Directors with Sir Mohammed Anwar Pervez OBE, HPk, as the Vice-Chairman.

The Government of Pakistan through the State Bank of Pakistan holds 49 percent of the shares in UBL.

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