UBL will be announcing its CY18 financial result on February 20th, 2019. The bank to post earnings of Rs 14 billion (Earning per share of Rs 11.47) in CY18, down by 46% YoY.
On a sequential basis we expect an uptick in earnings of 21% QoQ attributable to higher fee income, dividend income and slight jump in NII.
Profitability of the bank during the year has faced a severe dent on account of a Rs 8,847 million one-off charge in lieu of the Honorable Supreme Court’s decision on the pension liability case.
Ex-pension liability it is expected that the earnings downturn of 26% YoY.
Earnings during the year have faced severe contraction also because of heavy provisioning expenses (Analysts expect Rs 10.8 billion cumulatively for CY18) on the overseas loan book (primarily the UAE book which accounts for 75% of international advances).
Benefit of the rate hikes by the SBP has not particularly come through for the bank as expected stagnant NII during CY18 primarily owing to its high PIB base (currently 20.4% of total assets).
Furthermore, analysts expect a cash payout of Rs 2.00 per share during 4Q, taking total dividend for the year to Rs 10.00 per share.