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The first commercial bank to announce its audited results for the year l999

Feb 14 - 20, 2000

United Bank Limited (UBL) is the first commercial bank in the country to announce its audited results for the year l999. The Bank was able to come out with the audited results within a few weeks after the year end. This was possible only due to successful implementation of a comprehensive MIS and financial reporting system despite having a network of 1416 branches in Pakistan and overseas operations in seven countries. This was announced by the outgoing president of the Bank, Zubyr Soomro while briefing the press.

UBL has posted an operating profit of Rs1.4 billion for the year ending December 31,1999 as against Rs 133 million operating profit for the previous year— reflecting a ten-fold growth. "I am delighted to report that bank's net revenues from funds (NRFF) increased to Rs 2.8 billion registering growth of 62 per cent and the Bank's intermediation cost ratio improved to 3.5 per cent as against 3.7 for the previous year. Overall increase in deposits was by 8.9 per cent despite the discontinuation of bank's prize schemes. The advances increased by 92 per cent and included a substantial increase in its market share of seasonal cotton ginning and rice financing" said Soomro.

All overseas locations reported profits in 1999. In addition to that domestic operations posted a handsome contribution to the results particularly made possible by the concerted efforts during the recent recovery campaign launched by the goverment. This was complimented by the strong performance fiom the Corporate Banking Division and Treasury.

Commenting on the recent successful launch ofs a series of new products, Soomro stated that the Bank's product development efforts had become quite professional and were focussing both on customer service and revenue generation. The combination of TezRaftaar and Remit-N-Win has already resulted in a significant increase in remittance volumes.


{Rupees in million)

% change

31.12.99 31.12.98 Over


Markup/interest and discount and/or return earned 0.2741 8,699 18.1

Less: Cost/Return on deposits, borrowings etc . (7,509) (6,989) 7.4

Net Revenue from Funds 2,766 1,710 61.7

Fees, Comm., Exchange and Other Income 3,134 2,793 12.2

3,134 2,793 12.2

5,900 4,503 31.0

Administrative expenses (4,517) (4,370) 3.4

Operating Profit/(Loss) 1,383 133 941.8

Provisions/Unusual Items (129} (6,733) 98.1

Profit/(loss) 1,253 (6,601 ) 119.0

The highlights of the performance are:

• An increase in Net Revenue From Funds (NRFF) to Rs.2.5 billion driven both by an increase in earning assets and spreads.

• A growth in fees, commissions and exchange of 13 per cent despite an overall contraction in the country's trade volumes.

• Domestic deposits increased by 8.9 per cent to Rs. 100 billion. However, if the prize based schemes where the volumes amounted to Rs.14 billion at peak had not been curtailed domestic deposits would have reflected the real growth. In spite of this, UBL's market share in total deposits of Bank grew to 9 per cent during the year.

• This adverse impact on our deposit levels naturally affected intermediation cost. which are seen as a percentage of deposits.

On the assets side most of the growth was from corporate customers where advances increased to Rs 25 billion. This has been managed in a controlled and professional way with an emphasis on bringing in quality customers and entirely acceptable risk. UBL is now recognized as a competent and effective arranger of syndicated financing.

Despite an adverse economic environment, there was a significant reduction in the non-performing loans. Total recoveries and restructuring of non-performing loans during the year amounted to Rs 7.7 billion, which includes Rs.3.6 billion in cash recoveries. Net of provisions, the Bank's non-performing loans decreased to 19 per cent from 29 per cent in the previous year.

The Bank has launched two agri-based structured lending products for cotton and rice. These catered to small and medium sized industries. In both cotton and rice financing bank increased its market share from below 6 per cent to 27 per cent and 25 per cent respectively. In line with continued focus to increase market share export business, another product was launched in 1999 facilitate rice exports. The Bank expects to enhance its market share substantially in this sector during the year 2000.

The Bank's IT Division achieved a number of milestones during the year. It successfully implemented a new version of the homegrown branch banking software, Unibank Plus, in 80 branches throughout the country. UBL is the first bank in the country to execute an enterprise licensing agreement with Microsoft, This will enable the Bank to standardize its office automation function and keep abreast with the latest technology.