AHCML Research has released its report on the UBL Result Review for the first quarter of calendar year 2026 (1QCY26), noting that while capital gains have boosted profits, taxes have significantly impacted them.

– UBL achieved a 34.1% profit growth in 1QCY26, largely due to a 422% increase in securities gains to PKR 30.42 billion and an 18% rise in net interest income to PKR 99.42 billion. The reversal of credit loss allowances amounted to PKR 0.46 billion, contrasting with a charge of PKR 1.61 billion in the previous year. While the core banking sector remains strong, profits heavily depend on volatile treasury gains. Operating expenses rose 52.3% to PKR 40.61 billion, placing pressure on efficiency ratios. The sustainability of these results may not extend into future periods.

– Net mark-up/interest income grew by 18% to PKR 99.42 billion, while total mark-up/return/interest earned increased by 24% to PKR 323.53 billion. However, mark-up/interest expenses also rose by 26.8% to PKR 224.11 billion, reflecting increased funding costs.

– Non-mark-up income surged 157.9% to PKR 43.39 billion, driven by:

– Fee and commission income, which rose 19.1% to PKR 8.94 billion.

– Foreign exchange income, which increased 14% to PKR 4.18 billion.

– Securities gains, which jumped 422% to PKR 30.42 billion due to favourable market conditions.

– Other income, which rose 179% to PKR 586 million.

– Total income increased by 41.3% to PKR 142.81 billion, reflecting the strength of core lending and treasury operations.