Union Bank operating income grows 42% in 1Q15

Union Bank of Colombo's (UBC) first quarter results in 2015 have been positive, which is a reflection of the new strategy that is in place.

Following the change in strategy, the Bank's rapid transition to a full- fledged commercial bank with wider focus on Retail, SME and Corporate sectors saw several key changes.

The significant capital infusion of Rs. 11.4 billion received from Culture Financial Holdings, an affiliate of TPG, one of the largest private global investment firms in the latter part of 2014 placed Union Bank within the top five private sector banks in Sri Lanka, in terms of market capitalisation which paved the way for a complete transformation in its business strategy. Technology continues to be a key enabler for UBC with significant investment being made to upgrade systems and introduce new systems resulting in greater efficiency in processes and delivery systems.

The Bank's product and service portfolio is also being revamped and will provide end-to-end financial solutions to support personal and business needs. This will see the launch of several new products in the near future.

Director and Chief Executive Officer, UBC, Indrajit Wickramasinghe said, "After the landmark investment and the transition to be within the top five private commercial banks in Sri Lanka in terms of market capitalisation, the bank has realigned its infrastructure, human capital, systems and processes and is confidently gearing to take on the challenges of the highly competitive banking industry.

We are pleased to see the recent restructuring efforts yielding satisfactory results during the first quarter of 2015."

The Bank recorded an increase in revenues for the 1Q15 in comparison to the corresponding quarter in 2014. Operating income for 1Q15 grew by 46% YoY to Rs 662.5 million. The primary reasons for this was the strong growth in loans and advances, improvement in margins and the quality of the loan book.

The Group also recorded a significant increase in revenues for the 1Q15 in comparison to the corresponding quarter in 2014.

Total operating income for 1Q15 grew by 42% YoY to Rs 801.4 million.

The Bank reported a profit before impairment of Rs 116.4 million up 21% YoY in comparison to the corresponding period of last year.

The Bank reported a net profit after tax of Rs 25.1 million for the quarter up 228% YoY.

This is despite the significant investments that have been made, in line with the new strategic initiatives.

The total assets of the Bank stood at Rs 49.4 billion and the total assets of the Group stood at Rs 53.3 billion as at March 31, 2015.