Union Bank records 157% increase in after tax profits

Further highlighting its strong position as one of Sri Lanka’s fastest growing banks, Union Bank reported a significant upturn in its performance for the half year ended 30 June 2011.

The Bank’s after-tax profits improved by 157.3% to record Rs 128.7 m up from Rs. 50 m of  period ended 30 June 2010, whilst pre-tax profits increased by 56.6% to Rs. 206.8m in comparison to the corresponding period of last year. Net Interest Income increased by 35.9% to 154.7 mn over the preceding year.  Similar growth was also achieved in the banks core activities.  Gross loans and advances increased by 28.2% during the six months to reach Rs. 12.9 bn whilst total deposits increased to Rs. 14.8 bn as at 30 June 2011. Gross non performing advances ratio improved to 6.05% from 9.19% of June 2010. Overall, the group highlighted an after tax profit of Rs. 132.7 m.

Director and CEO Anil Amarasuriya expressed his satisfaction over these results and stressed that these were achieved against a back drop of declining interest rates .  He emphasised on the bank’s future potential and its ability to emerge as a strong performer in the Industry. Following the bank’s successful Initial Public Offering, the bank is now strategically positioned to embark on an aggressive growth strategy in addition to comfortably surpassing the regulatory minimum capital requirements for commercial banks.  

Amarasuriya further disclosed that the bank is investing significantly in brand building and network expansion as well as value additions to its existing product portfolios and launching of new products in order to provide superior service delivery to a wider customer base and penetrating new markets. The bank’s primary focus is to be the preferred bank for the SME and Retail sectors, he further added. The bank’s branch network now stands at 26 with 7 branches located in North and East with 3 new branches opened during the 2nd quarter.m In furtherance of its new strategic direction and expansion policy Union Bank embarked on a diversification plan which highlighted positive strides in a short period of time with the bank acquiring Sri Lanka’s premier asset management company National Asset Management Limited in February 2011 and recently receiving approval from the Central Bank of Sri Lanka to acquire TF&G a registered finance company.  This acquisition fits in well with our diversification and expansion policy to increase focus and growth in the SME sector, hence we earmark this acquisition as yet another stepping stone to further  penetrate the Small enterprises segment Amarasuriya said.