Despite its strong-footed entry into the first quarter of 2020, Union Bank’s core banking growth compressed since mid-March up until the end of the first quarter, owing to unprecedented economic impacts of the ongoing global pandemic.
Net Interest Income (NII) of the Bank was affected by low credit growth and the pressure on lending rate caps introduced by the Central Bank of Sri Lanka (CBSL). As a result, the Bank’s NII increased only by 2% YoY to Rs.1,031 Mn. The effective fund management strategies coupled with timely re-pricing of assets and liabilities contributed towards sustaining NII amidst challenges.
The Bank’s fee and commission income declined by 8% YoY to Rs. 201 Mn due to the drop in demand for fee based activities across credit related product lines and mainly due to the reduction in the import and export business.
The Bank’s Treasury recorded a notable performance with a significant YoY increase of Rs.119 Mn in capital gains mainly due to the favourable movements of interest rates. Other Operating Income of the Bank increased significantly on the back of exchange rate deflation by 5% YTD. Operating Income of the Bank for the period was Rs. 1,498 Mn.
As a result of focused efforts on enhancing operational efficiency, the Operating Expenses of the Bank increased only by 5% YoY to Rs. 1,001 Mn during the period under review. Pre-impairment profits of the Bank were Rs. 498 Mn for the period and indicated a growth of 20% YoY. Weighed down by the challenges of the operating environment, Union Bank recorded a subdued profit before all taxes of Rs. 405 Mn. Profit after Tax (PAT) of the Bank was Rs. 180 Mn.
Total assets of the Bank stood at Rs. 131,195 Mn as at 31st March 2020. The Bank’s loans and receivables stood at Rs. 78,266 Mn and the deposits base was Rs. 83,924 Mn by quarter-end.
The Group comprising the Bank and its two subsidiaries, National Asset Management Limited and UB Finance Company Limited, reported a Profit after Tax of Rs. 195 Mn for the period. Total assets of the Group were Rs. 139,206 Mn of which 94% was represented by the Bank.
Director/CEO Indrajit Wickramasinghe said, “We are currently operating in unprecedented conditions and are making every effort to provide our customers optimum solutions and financial support during these difficult times. The Bank has withstood a challenging first quarter, and the results have been impacted by the economic trials of the health crisis which began its effects from mid-March and is expected to bear a ripple effect on the banking sector as well as the business community in the coming months.”
www.dailynews.lk
Net Interest Income (NII) of the Bank was affected by low credit growth and the pressure on lending rate caps introduced by the Central Bank of Sri Lanka (CBSL). As a result, the Bank’s NII increased only by 2% YoY to Rs.1,031 Mn. The effective fund management strategies coupled with timely re-pricing of assets and liabilities contributed towards sustaining NII amidst challenges.
The Bank’s fee and commission income declined by 8% YoY to Rs. 201 Mn due to the drop in demand for fee based activities across credit related product lines and mainly due to the reduction in the import and export business.
The Bank’s Treasury recorded a notable performance with a significant YoY increase of Rs.119 Mn in capital gains mainly due to the favourable movements of interest rates. Other Operating Income of the Bank increased significantly on the back of exchange rate deflation by 5% YTD. Operating Income of the Bank for the period was Rs. 1,498 Mn.
As a result of focused efforts on enhancing operational efficiency, the Operating Expenses of the Bank increased only by 5% YoY to Rs. 1,001 Mn during the period under review. Pre-impairment profits of the Bank were Rs. 498 Mn for the period and indicated a growth of 20% YoY. Weighed down by the challenges of the operating environment, Union Bank recorded a subdued profit before all taxes of Rs. 405 Mn. Profit after Tax (PAT) of the Bank was Rs. 180 Mn.
Total assets of the Bank stood at Rs. 131,195 Mn as at 31st March 2020. The Bank’s loans and receivables stood at Rs. 78,266 Mn and the deposits base was Rs. 83,924 Mn by quarter-end.
The Group comprising the Bank and its two subsidiaries, National Asset Management Limited and UB Finance Company Limited, reported a Profit after Tax of Rs. 195 Mn for the period. Total assets of the Group were Rs. 139,206 Mn of which 94% was represented by the Bank.
Director/CEO Indrajit Wickramasinghe said, “We are currently operating in unprecedented conditions and are making every effort to provide our customers optimum solutions and financial support during these difficult times. The Bank has withstood a challenging first quarter, and the results have been impacted by the economic trials of the health crisis which began its effects from mid-March and is expected to bear a ripple effect on the banking sector as well as the business community in the coming months.”
www.dailynews.lk
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