UBL reported PBT of Rs 52.1 billion in 2021, being the highest profit ever in the history of the Bank. This is also one of the highest growth in profit across the banking sector with an increase of 52% in the bottom line this year. Earnings per Share (EPS) was measured at Rs. 25.23 (2020: Rs. 17.07). The Bank declared a final dividend of Rs. 6.0 per share for Q4’21, which is in addition to the Rs. 12.0 per share interim dividends declared earlier during this year. This is significantly higher than the full year dividend of Rs 12.0 per share declared in 2020. The Bank maintained its resilience across all core business segments as the economy gradually recovers from the impacts of the pandemic and business activity regains its momentum.
One of the largest branch networks serving an ever increasing customer base
UBL remains one of the largest and systemically important financial institutions in the country. The Bank’s network extends to 1,339 branches within Pakistan, 1,442 ATMs and over 34,000 Omni agents. The Bank continues to build on its award winning digital banking services which have been acknowledged as one of the best in Pakistan. A franchise that serves across all segment profiles, UBL has over 10 million customers, with growth in business driven by an aggressive sales effort, well supported by a state of the art digital banking. The branch network spreads across each province of Pakistan, down to the remotest geographies and is the pride and core strength of the institution. UBL is well on its way to live the ambition to provide access to credit, digital payments and financial inclusion to every citizen of Pakistan.
Branch Banking delivered the highest deposit growth in the last 5 years of 19% in 2021. Domestic deposits stood at over Rs. 1.5 trillion, with an increase in market share to 8.3% of banking sector deposits. The Bank added 564,000 new current account relationships in the year, which led to a strong growth of 18% in average current deposits, with volumes reaching Rs. 635 billion in 2021. The buildup in low cost deposits led to a sharp reduction in cost of deposits, to 3.6% in 2021 from 4.5% in 2020.
UBL is a proud participant in all major economic development programs launched by the Government of Pakistan and the State Bank of Pakistan (SBP). The Bank continues to play a strong role in the Mera Pakistan Mera Ghar housing initiative with more than Rs. 2.0 bln disbursed to applicants. The Bank is also at the forefront of the Prime Minister’s Kamyab Jawab program, aimed at financial empowerment of youth of Pakistan. The Bank surpassed the Rs. 1.0 billion mark in loan disbursements to various entrepreneurial and agriculture based projects under this initiative. Leveraging on its leadership position in the home remittances space with a market share of over 20%, UBL remains one of the key partners in the Roshan Digital initiative, with 64,000 accounts opened and inward remittance of USD 378 million.
UBL was selected by the SBP to offer collateral-free lending to SMEs through a digital platform under SBP’s SME Asaan Finance (SAAF) Scheme. UBL also partnered with Pakistan Poverty Alleviation Fund (PPAF) under growth for Rural Advancement and Sustainable Progress (GRASP) initiative.
The Bank recently launched “UBL Urooj Account”, an end to end financial solution, exclusively catering to the needs of the women of Pakistan. This is a must have account for women with special features and alliances, designed for financial inclusion and empowerment of women.
UBL ‘Ameen’ – the Islamic banking business continues to gain momentum
Islamic banking remains one of the key strategic segments as the Bank continues to expand UBL Ameen’s footprint. The Islamic network now stands at 145 branches (2020: 100 branches), well supported by 197 Islamic Banking Windows (IBWs) within commercial branches (2020: 187 IBWs). UBL Ameen’s deposits base closed at Rs. 140 billion at Dec’21, growing by a strong 25% over Dec’20. The asset acquisition drive gained significant momentum in 2021, as the loan book more than doubled, from Rs. 21 billion at Dec’20 to Rs. 44 billion at Dec’21. The Bank views the Islamic segment as a huge growth opportunity and will continue to aggressively expand UBL Ameen’s presence within this growing sector.
Significant growth in loan book while continuing to improve credit quality
Bank level net advances closed at Rs. 646 billion at Dec’21, growing by a strong 22% over Dec’20. Led by the Corporate Banking Group (CBG), the domestic loan book grew by 20% year on year, closing at Rs. 517 billion at Dec’21. The consumer portfolio recorded a growth of 7% over last year, as the Bank maintained its momentum within the secured autos segment. The Bank also expanded within the SME and rural banking space, as the portfolio recorded an increase of 13% over the previous year, by creating differentiation through customized financial solutions, digitization and collaboration with partners. The Bank also strengthened its credit standards and stepped up its recovery efforts against non-performing accounts in both domestic and international businesses, which resulted in a net provision reversal of Rs. 955 million for the year 2021.
Non Fund Income makes a significant contribution to overall revenues
Non-Fund Income (NFI) recorded significant growth of 37% over last year, reported at Rs. 23.4 billion, and contributed 25% of the overall gross revenues of the Bank. The year witnessed an increase in all major fee based services with a strong momentum within all lines of business. Home remittances commissions of Rs. 1.7 billion were earned during the year as UBL maintained its market leadership as the preferred partner to the overseas Pakistani diaspora. Income from card related fees was recorded at Rs. 2.5 billion for 2021, up by 59%, as the debit cards portfolio increased to nearly 2.7 million, with new acquisitions of 703,000 during the year. The Bank continues to maintain its strong momentum within the bancassurance space as premium volumes grew by 41% to Rs. 3.7 billion with commissions of Rs. 1.5 billion earned during the year. The Bank earned investment banking fees of Rs. 480 million in 2021 as against Rs. 330 million in 2020, originating from debt arrangement and advisory mandates. Cash Management commissions grew by 16% as throughput volumes increased significantly during the year driven by the acquisition of a number of employee banking mandates, serviced through the Bank’s Digital Corporate Portal. The Bank also realized capital gains of Rs. 3.8 billion, mainly on its sovereign bond holdings in UBL International, while foreign exchange income of Rs. 4.0 billion was earned on the back of effective balance sheet positioning and healthy trade flows during the year.
International business makes a strong contribution to bottom line
UBL International posted a PBT of USD 39 million for the year 2021 as the Bank’s GCC operations now reflect stability, following specific de-risking measures over the last few years. The Bank is now operating a leaner business model with emphasis on maintaining strong credit quality and deepening its foundation of low cost funding.
Digital Banking – Best in its class with growing penetration
UBL’s position as the industry leader in the Digital Banking space continues to be recognized as the Bank was awarded the “Best Mobile App” and “Best Emerging Technology” awards at the prestigious Pakistan Digital Awards 2021. The award recognizes outstanding innovation and creativity of the best digital professionals and companies from across the country. The Bank aims to provide a seamless customer experience across all touchpoints and technology platform-based solutions. UBL continues to strive to create a more holistic payments ecosystem which will clearly transform the payments landscape in Pakistan.
During the year, the Bank released an upgraded version of its UBL Digital app., which continues to be very popular amongst its growing customers base. The number of registered digital customers stood at 2.1 million at Dec’21, while the number of digital financial transactions grew by 84% year on year.
Commenting on the results, Mr. Shazad G. Dada, President & CEO of UBL said: “UBL continues to grow from strength to strength delivering record profit in the history of the institution. This great milestone was made possible by the resilience, dedication and commitment of UBL staff and our valuable customers who entrust us to support them with market leading financial solutions. We are committed towards maintaining our position as one of the country’s most innovative and fastest growing digital bank, providing unparalleled service and convenience to our customers. Our deposits growth has been one of the highest in recent years, and will remain a core driver for future growth. Investment in both the physical and technological infrastructure will continue to drive a better and improved customer experience across each touch point. For UBL, our customers are at the heart of everything we do, and they drive our ambitions for the future. We would like to thank each one of our customers for being a part of our growth journey and look forward to continuing to bring you even better and more innovative solutions in the years to come.”
