United Bank Limited conducted its analyst briefing on Friday. The management of the bank discussed UBL’s financial performance during 1HCY12 and its outlook and strategy in the present economic scenario
UBL’s ROE has improved to over 26% compared to 23% in CY11. The management aspires to maintain an ROE of above 25% going forward
Bank may eventually reduce its exposure in mutual funds, however, for now bank has opted for stock dividends for tax savings from investments in mutual funds
Although UBL has no immediate plans to reduce FSV benefits, it may reduce it in due course; UBL has availed FSV benefit to the tune of PKR3.2bn
It was highlighted by the management that though street talks suggest that SBP might slash discount rate by 50bps in the upcoming monetary policy but country’s economic fundamentals do not justify such an action
We believe slowdown in NPL accretion along with decline in provisioning charges and augmenting non-interest income would continue to support bottom-line during CY12
We have a Neutral stance on the stock with Dec12TP of PKR94/share; stock offers 12% total return, including a CY12 dividend yield 9%
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