Union Bank of Colombo PLC (The Bank) and its subsidiaries UB Finance Co. Ltd. and National Assets Management Ltd. (The Group) ended the first three months of 2016 with an impressive performance, reflecting a continued growth momentum with forward looking expectations.
The Bank’s post tax profit for the quarter is Rs. 80.4 mn, a 220% increase year on year (YoY). Total operating income of the Bank grew by 16% YoY to Rs.766 mn.
Net interest income (NII) of Rs. 443.8 mn recorded a 16% reduction over the comparative period ended March 31, 2015 due to a higher investment made in Unit Trusts of which the return is reflected in net trading income along with the narrowing margins.
Director and Chief Executive Officer Indrajit Wickramasinghe stated “We are off to a good start in 2016, and the Bank’s 1st quarter performance signifies the Bank’s capacity to reach the ambitious growth projected for the remainder of 2016. With the backing of a strong capital base and a focused strategic business plan; UBC is well geared to take on the challenges and opportunities of the market.”
Profitability was strengthened by much improved net fee and commission income, net gains from trading as well as other operating income. The Bank’s net fee and commission income stood at Rs. 61.7 mn at the end of Q1 2016, an increase of 146% over the comparative period with fee income from business lending, cards and trade transactions being the primary contributors of the said impressive growth. Net gains from trading led by investments in unit income recorded a growth of Rs. 115.3 mn YoY. The Bank does not have any exposure to the equity market.
Impairment charges have declined by Rs. 55.8 mn YoY, a 96% reduction owing to stringent management of recoveries. Net NPL ratio of the Bank has improved to 2.3% as at the end of Q1 2016.
The Bank’s total operating expenses increased by 23% to Rs. 672 mn due to the investments in staff and technology in keeping with the strategic plans. Corresponding to the above investments, the cost to income ratio of the Bank increased to 88% over 83% of the comparative period.
The Bank remains well capitalized within the minimum regulatory requirements, with Tier 1 Ratio of 24.9% and Tier 2 Ratio of 24.5%.
The Bank’s balance sheet expanded by 7% during the three months’ period to reach Rs. 75,823 mn in comparison to 31st December 2015. Loans and advances grew by 7.8% to Rs. 43,259 mn while the customer deposits reflected a growth of 13% to Rs. 42,598 mn.
The Group’s post tax profit for the quarter was Rs. 142.5Mn in comparison to Rs. 37.8 mn, an impressive growth of 276% YoY.
The total assets of the Group grew by 7% during the three months’ period to reach Rs. 82,078Mn, while the customer deposits reflected a growth of 12% amounting to Rs. 46,633 mn.
The Bank’s post tax profit for the quarter is Rs. 80.4 mn, a 220% increase year on year (YoY). Total operating income of the Bank grew by 16% YoY to Rs.766 mn.
Net interest income (NII) of Rs. 443.8 mn recorded a 16% reduction over the comparative period ended March 31, 2015 due to a higher investment made in Unit Trusts of which the return is reflected in net trading income along with the narrowing margins.
Director and Chief Executive Officer Indrajit Wickramasinghe stated “We are off to a good start in 2016, and the Bank’s 1st quarter performance signifies the Bank’s capacity to reach the ambitious growth projected for the remainder of 2016. With the backing of a strong capital base and a focused strategic business plan; UBC is well geared to take on the challenges and opportunities of the market.”
Profitability was strengthened by much improved net fee and commission income, net gains from trading as well as other operating income. The Bank’s net fee and commission income stood at Rs. 61.7 mn at the end of Q1 2016, an increase of 146% over the comparative period with fee income from business lending, cards and trade transactions being the primary contributors of the said impressive growth. Net gains from trading led by investments in unit income recorded a growth of Rs. 115.3 mn YoY. The Bank does not have any exposure to the equity market.
Impairment charges have declined by Rs. 55.8 mn YoY, a 96% reduction owing to stringent management of recoveries. Net NPL ratio of the Bank has improved to 2.3% as at the end of Q1 2016.
The Bank’s total operating expenses increased by 23% to Rs. 672 mn due to the investments in staff and technology in keeping with the strategic plans. Corresponding to the above investments, the cost to income ratio of the Bank increased to 88% over 83% of the comparative period.
The Bank remains well capitalized within the minimum regulatory requirements, with Tier 1 Ratio of 24.9% and Tier 2 Ratio of 24.5%.
The Bank’s balance sheet expanded by 7% during the three months’ period to reach Rs. 75,823 mn in comparison to 31st December 2015. Loans and advances grew by 7.8% to Rs. 43,259 mn while the customer deposits reflected a growth of 13% to Rs. 42,598 mn.
The Group’s post tax profit for the quarter was Rs. 142.5Mn in comparison to Rs. 37.8 mn, an impressive growth of 276% YoY.
The total assets of the Group grew by 7% during the three months’ period to reach Rs. 82,078Mn, while the customer deposits reflected a growth of 12% amounting to Rs. 46,633 mn.
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