Union Bank Group’s pre-tax profit up by 28% in 1Q

Further highlighting its strong position as one of Sri Lanka’s fastest growing banks, Union Bank reported a noticeable upturn in its performance for the period ended 31 March 2012.

The bank’s operating profit before VAT and corporate tax improved by 21.4 %, recording Rs 142.7 m up from Rs. 117.5 m for the period ended 31 March 2011.

Net interest income increased to 295.7 m highlighting a 24.6% increase over the preceding year. Similar growth was also achieved in the bank’s core activities. Gross loans and advances increased by 11.9% during the three months to reach Rs. 19.2 b recording a 64% growth in comparison to March 2011.

Total deposits increased to Rs. 20 b as at 31 March 2012. Overall, the group highlighted a total turnover of Rs. 887.6 m and a operating profit on ordinary activities before tax of Rs. 158.6 m a 30% increase over the corresponding period of last year.

Union Bank Director/CEO Anil Amarasuriya expressed satisfaction over these results and stressed that these were achieved against challenging market conditions. He emphasised on the bank’s future potential and its ability to emerge as a strong performer in the Industry.

With the predicted high economic growth rates, the banking and finance sector will contribute positively in driving the country’s way forward. In this context, Union Bank has leveraged on its strong financial position and has comfortably surpassed the regulatory requirements on capital adequacy placed by the Central Bank of Sri Lanka and is already in excess of the Rs. 5 b mark required by 2015 enabling more space to continue bank operations safely and to remain steady and resilient.

Following the bank’s successful Initial Public Offering, the bank is now strategically positioned to embark on an aggressive growth strategy and its expansion plan to become a financial powerhouse has taken positives strides in short period of time with the rapid expansion of its branch network and related diversifications, the acquisition of NAMAL, Sri Lanka’s premier asset management company, and the recent acquisition of The Finance & Guarantee Company Ltd., a pioneering finance company established in 1961.

These acquisitions fits in well with the expansion policy to increase focus and growth in the SME sector and earmark as value additions to the channel strategy to further penetrate the Small and Medium Enterprises segment, Amarasuriya said.

Union Bank also unveiled its new state-of-the-art Head Office on 6 January 2012. Governor of the Central Bank of Sri Lanka Ajith Nivard Cabraal ceremonially declared opened the new premises located at No. 64 Galle Road, Colombo 3.

The new head office marked another momentous occasion for Union Bank, bringing together a combination of state of the art technology, competitive financial solutions and superior service delivery under one roof.

As the preferred bank for the Small and Medium Enterprises, Union Bank continues to add value in strengthening the sector and the opening of the new head office further signifies its pledge in delivering flexibility and efficiency to the bank’s customers in order to fuel their growth to greater heights.

Amarasuriya further stated that the bank was 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 deliver an unique value proposition providing superior service delivery to a wider customer base as well as penetrating new markets.

The bank’s branch network now stands at 32 with seven branches located in north and east. Two new branches will be opened in May 2012 in Amabalangoda and Chilaw.