Union Bank further consolidates SME focus in Q1

Wednesday, 15 May 2013 00:01 - - {{hitsCtrl.values.hits}}

Union Bank of Colombo PLC (UBC) Director / Chief Executive Officer Anil Amarasuriya strongly iterated yesterday that the Bank has continued to successfully journey towards its aspirations of positioning itself as the ‘top of mind’ SME Bank in Sri Lanka during the first quarter of 2013 amidst the challenges in the banking sector.

Despite challenges in the banking sector in the first quarter of 2013, Union Bank reported a post-tax profit of Rs. 62.9 million for the first three months of 2013. The bank has shown progress in its core banking operations recording growth in its Loans and Advances of 9% resulting from an increase in the loan portfolio to Rs. 21.9 billion. Total deposits also increased by 7% to Rs. 25.3 billion during the same period.

Interest income grew by 34% in comparison to the comparative due to the combined reasons of increases in the loan portfolio and interest rates. Similarly, due to the increase in the deposit base and the interest rates, interest expense also reported a 70% increase. A reduction of Rs. 49 million in foreign exchange income was recorded in comparison to the first quarter of 2012 due to the stabilisation of the rupee. A 16.3% increase in overheads was also reported as a result of the expansion in branch network and increase in staff required for the new branches to be opened.

“At Union Bank our focus is clear” said Amarasuriya. “We want to become the ‘SME Bank’ in Sri Lanka because we know our fundamentals are apt for us to add value to this consumer sector”. This is in line with the Bank’s vision of becoming the preferred bank for Small and Medium entrepreneurs.

Given the unwavering focus of the SME sector by Union Bank, the bank has rapidly expanded its presence, taking its total network to 38 branches by May 2013.

“We hope to expand our network to fifty branches by the end of this year” said Amarasuriya. This expansion has been honed and focused and geared specially to grow Union Bank’s SME portfolio.

Realising the vital role that IT plays in customer outreach, Amarasuriya stated: “Union Bank’s has invested in excess of Rs. 600 million to introduce a new core banking system, which will complete rollout this year. This will help to give the bank a significant upward momentum in technological advancements and assist the bank to move towards its objective of being an IT premiered bank in the country.”

He also commented that with the intention of accelerating Union Bank’s SME presence, a sophisticated robust risk management system was acquired, enabling more responsiveness to customers.

In addition the bank has launched a host of new products and ancillary services adding value to the bank’s promise of providing total financial solutions to SME and retail customers.

To further augment its SME focus, Union Bank has also partnered German organisation GIZ to improve access to finance for SMEs assisting them through banking products, procedures, methodologies, setting-up of special SME branches and SME service centres, development and organising of staff training programmes and SME customer training which will enable the bank to sustainably enhance their credit portfolio to its SMEs customers.

It will help generate employment, impact income, reduce poverty and enhance regional development.