Union Bank posted significant growth in its core banking operations reflecting a 62% Year on Year (YoY) growth in profits from operating activities to report Rs.362Mnduring the first quarter of 2019.This was despite the continuously challenging macroeconomic backdrop which had been affecting the industry over the past few quarters.
Union Bank recorded an impressive profit before all taxes of Rs. 366Mn, a 49% growth YoY for the period ended March 2019, highlighting the Bank’s continued performance and progress towards achieving its strategic growth objectives for the year.
Continuous focus on revenue optimisation through portfolio re-alignment within and across business units resulted in a 19% YoY growth in Net Interest Income (NII) which was Rs.1,013 million during the period ended 31st March despite the increase in cost of deposits.
Fee and commission income grew by 19% YoY to Rs.266 Mn during the period under review. The growth in fee income has been from across a number of products including fees collected on Credit Cards -the newest addition to the product portfolio which made its debut in late 2018.
Capital gains from government securities for the period were Rs.71 Mn which was a 23% increase YoY. Income from investment in units for the period was Rs. 70 Mn and was a reduction of 33% YoY. During the quarter under review, the Total Operating Income of the Bank rose to Rs.1,368 Mn, and represented a growth of 8%YoY. Total Operating Expenses were prudently managed and grew only by 2% YoY to Rs.955Mn during the period. As a result, the operating margin improved by 24% YoY to Rs.413Mn.
Union Bank’s Director/CEO Indrajit Wickramasinghe said, “We have got a very positive start to the year 2019 with significant growth in the core banking operations. However the macro environmental conditions are very challenging which will have an impact going forward.”
The Group consisting of the Bank and its two subsidiaries, UB Finance Company Limited and National Asset Management Limited reported a Profit before all taxes of Rs.401 Mn for the period which was a growth of 31% YoY. Total assets of the Group was Rs. 134,065 Mn of which 93% was represented by the Bank. The Group maintained a healthy Core Capital Ratio of 16% as at the balance sheet date.
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