KARACHI, March 11: The United Bank Limited has declared a pre-tax profit of Rs2.8 billion for the year ended December 31, 2002 — the first audited results since the privatization of the bank.

This was almost double the pre-tax profit declared last year, which was Rs1.5 billion, excluding extraordinary items.

According to the UBL, the improvement is all the more impressive considering the high market liquidity and increased competition in the sector as interest rates continue their downward spiral.

The major driver for this increase is net revenue from funds (NRFF), which has gone up by Rs1 billion to Rs6.1 billion before provisions.

The NRFF increase in turn has come mainly from lower cost of funds and the bank’s focus on low cost deposits. The non- funded income of the bank has increased by Rs0.5 billion to Rs3.4 billion, signifying an all-round improvement. Provisions are substantially lower compared to the last year, resulting in a net income growth of Rs1.9 billion (28 per cent). The expense for the year shows an apparently sharp increase mainly because of an extraordinary reversal in 2001. After adjusting 2001 costs, the administrative expense for 2002 has increased by Rs0.8 billion to Rs5.9 billion.

Deposits grew by Rs20.9 billion to Rs162.2 billion (14.8 per cent growth). This increase is mainly in the low cost segment. Low cost deposits have gone up by Rs15.1 billion to Rs94.9 billion (18.9 per cent growth). Expensive deposits have grown by Rs5.8 billion to Rs67.3 billion (9.4 per cent growth).

Performing advances have grown by Rs2.1 billion to Rs70.1 billion. Non-performing loans have reduced by Rs6.1 billion to Rs5.7 billion.

The UBL handled around Rs135 billion of import and export business during the year, an increase of 17 per cent as compared to the last year.—APP