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United Bank Limited (UBL) has delivered a strong financial performance for the nine months ended September 30, 2025, supported by higher interest income and improved operational efficiency. The bank’s profit after tax rose 79% year-on-year to Rs 98.5 billion, reflecting robust core earnings growth.
The Board of Directors also approved an interim cash dividend of Rs 8 per share (160%) for the third quarter. This is in addition to the Rs 13.5 per share (270%) interim dividend announced earlier this year, bringing total payouts for 9M 2025 to Rs 21.41 per share.
Interest Income Drives Profit Growth
The net interest income (NII) of UBL reached Rs 91.97 billion during the third quarter, marking a 78% year-on-year increase. For the nine-month period, NII surged 154% to Rs 267.4 billion, driven by lower funding costs. Markup expense declined 18% YoY, giving the bank a strong net interest margin.
Non-interest income, however, showed weakness. It fell 42% year-on-year in the third quarter to Rs 13 billion, mainly due to a sharp drop in gains from securities trading. On the positive side, fee income rose 16%, while foreign exchange income increased 47% YoY, highlighting strength in core banking activities.
Efficiency Improves Despite Higher Costs
Operating expenses rose 37% YoY to Rs 31.9 billion in Q3. However, strong income growth led to a cost-to-income ratio of 30.3%, down from 31.3% in the same quarter last year. Provision reversals of Rs 0.8 billion also boosted pre-tax profits, which climbed 48% YoY to Rs 74 billion in Q3.
A higher effective tax rate of 53% moderated profit after tax growth to 36% YoY for the quarter. Still, overall profitability remained strong, with earnings per share reaching Rs 39.33 for 9M 2025.
UBL Dividend and Book Closure
The interim dividend of Rs 8 per share will be paid to shareholders whose names appear in the register by October 24, 2025. The share transfer books will remain closed from 27th to 29th October, 2025.
UBL Outlook
UBL’s performance this year reflects a favorable interest rate environment, improved cost control, and strong deposit dynamics. However, analysts note that future earnings will depend on deposit repricing trends, taxation, and the sustainability of current margins.
