Union Bank Q2 income up by 58.6%

Reporting on its performance for the six months ended in 2012, Union Bank of Colombo PLC (UBC) stated that a noticeable upturn in performance was seen in several areas.

Growth was highlighted in the bank’s core activities and shows a 53.5% year-on-year growth in the bank’s loan book to reach Rs. 19.8 b. Total deposits of the bank reported a year-on-year growth of 45% to Rs. 21.5 b as at 30 June 2012. During the six months period, gross loans and advances increased by 15.49% and the total deposits increased by 11.2%.

Interest income of the bank stood at Rs. 1,507 m with a 57.4% growth compared to the previous period. Interest expense showed a 98% growth due to the increasing interest rates and the growth in the base.

The bank showed a noticeable growth of 65.7% in non-interest income for the period. Non-interest expense also increased by 38.7%, mainly due to the expansion of the business operation.

Considering the stagnated market conditions, return from the equity portfolio continued with a negative impact for the second continuous quarter of the year. The bank shows a net asset value of Rs. 14.99 per share.  The first dividend after the listing of Rs. 0.15 per share was also declared during the quarter.

Union Bank reported a pre-tax profit of Rs. 184.4 m for the first half of 2012. This is a decrease of 10.8% compared to the previous period.

Union Bank Director/Chief Executive Officer Anil Amarasuriya stated that these results were achieved against challenging market conditions.

He emphasised that the bank had been building its core competencies to enhance its future potential and its ability to emerge as a strong performer in the industry.

He further stated that with the predicted high economic growth rates, the banking and finance sector would contribute positively in driving the country forward and that UB would stand to gain from this growth in the coming months.

As the preferred bank for the SME sector, Union Bank’s rapid expansion plan saw its branch network increasing to 34 branches by June 2012. Four new branches were open in Badulla, Ambalangoda, Horana and Chilaw during the year.