Union Bank of Colombo PLC (Bank), together with its subsidiaries (Group) reported an outstanding performance in t 2016, recording a Profit after Tax (PAT) of Rs. 553 million which is an increase of 117% compared to the previous year.
Also in a milestone achievement, the Group surpassed the Rs.100 billion mark in Total Assets, recording Rs.100.5 billion as at the year end. The impressive performance of the Group despite a challenging macro environment that prevailed, signifies its strong strategic focus towards accelerated growth.
The strong performance of the Bank resulted in Rs. 451.1 million of Profit after Tax reflecting a 103% YoY growth. This highlights Union Bank’s successful transition to a fully-fledged commercial bank with a wider focus on Retail, Corporate and SME sectors while ensuring productive deployment of capital; following the significant capital infusion that strengthened the Bank’s footings in the latter part of 2014.
Total Assets of the Bank grew to Rs. 93,009 million as at the year end, reflecting a healthy 31% growth over the previous year.
The principal source of income, the Bank’s Fund-based Operations recorded Rs. 2,507 million in 2016. This is an increase of 24% compared to the previous year - a noteworthy achievement, despite the reduction in interest spreads.
The Bank’s Loans and Advances marked a milestone growth since the inception of the Bank, with the portfolio rising to Rs. 55,438 million, recording a growth of 38% in comparison to the previous year. The composition of the Loans and Advances of the Bank changed in line with the new strategic focus, with the Retail Banking share increasing to 11%.
Reflecting a significant improvement in the quality of the portfolio, the Gross NPL Ratio recorded a noteworthy improvement to 2.4% as at year end in comparison to 3.6% as at the end of 2015.
The Net NPL ratio improved to 1.6% as at end 2016 in comparison to 2.7% as at end 2015.
The Customer Deposit Portfolio of Union Bank stood at Rs. 51,841 million at year-end, recording an impressive 38% growth in comparison to 2015. The Bank continued to focus on building its low-cost fund base by way of Current and Saving Account (CASA) acquisitions. Supported by several strategic initiatives which included localised promotions and inter-branch competitions implemented through the year, the CASA base of the Bank recorded an impressive growth of 37% YoY.
The Bank continued to invest in significant efforts to improve its Fee and Commission Income with the use of key enablers established during the previous years. The Fee and Commission Income of the Bank was Rs. 667 million which translated to 65% YoY growth, and could be mainly attributed to the increase in income from Loans, Cards, Trade and Remittances. Union Bank reported a Net Trading Income of Rs 409 million, which is a significant 47% growth YoY. The Bank has no Trading Equities and has not invested in any Equity Funds as at Balance Sheet date.
Other Operating Income of the Bank was Rs. 246 million, which reflects a growth of 47% YoY.
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