UCB profit jumps on strong investment income despite margin pressure

FE REPORT | Published: May 03, 2026 22:01:33

United Commercial Bank (UCB) secured a whopping 198 per cent year-on-year increase in consolidated profit to Tk 238 million in 2025 as it reaped handsome returns from investment income.
Investment earnings, including income from Treasuries, subordinated bonds, other private sector bonds, and investments, more than doubled to Tk 15.2 billion in 2025, according to the company's latest financial statement.
However, net interest income declined due to a sharp rise in interest expenses in a high-rate environment.
Deposits surged 23 per cent year-on-year to a historic Tk 683.9 billion, more than double the sectoral average growth.
UCB added nearly 678,000 new accounts during the year, including a large number of savings and current accounts, strengthening its retail base, which now accounts for 59 per cent of total deposits.
Agent banking also contributed steadily, with higher average deposits per outlet.
Stronger deposit inflows improved liquidity, bringing down the advance-deposit ratio to 83 per cent from over 91 per cent a year earlier.
Excess liquidity was channelled into low-risk government securities, pushing such investments up by 69 per cent year-on-year in 2025 to more than Tk 148 billion. Total assets expanded by 14.5 per cent to more than Tk 884 billion.
Loan growth remained measured at 8 per cent, reflecting a cautious approach focused on asset quality.
While the classified loan ratio stood at 15.5 per cent, the company's management indicated ongoing efforts to reduce stressed assets.
UCB made notable progress in digital transformation. Around 65 per cent of total transactions were processed through digital channels in 2025.
The bank's credit rating remained 'AA' in the long term with a negative outlook, reflecting ongoing pressure from capital and provisioning requirements.
No dividend has been declared for 2025 due to restrictions linked to provisioning shortfall.
Overall, UCB ended the year on a stronger footing, with improved liquidity, expanding digital operations, and steady earnings growth despite a challenging interest rate environment.
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