Union Bank reports Rs. 226.8 m PAT

As challenges in the industry continued in the third quarter of 2013, Union Bank reported a post tax profit of Rs. 226.8 million for the nine-month period, a decrease of Rs.39.2 million. A 15% drop compared to the corresponding period in 2012.

Anil Amarasuriya

Profit after tax declined due to an increase in impairments by Rs.136 million. Year-to-date impairment provision made against pawning was Rs.52.2 million. However, total operating income before impairments showed an increase of Rs.140 million compared to the previous period.

Net Interest Income for the Bank increased to Rs. 341 million during the quarter recording 9% growth. Net Interest Margin also improved compared to the first two quarters of 2013 caused by a reduction in the cost of deposits due to the reduction in interest rates.

Net fee and commission income of the Bank for the nine months also showed a positive variance with a 21% increase over the corresponding period and interest income increased to Rs. 921 million.

Total Operating Income for the nine-month period also grew by 11% during the quarter compared to last year.

Year-to-date expenses increased by Rs.122 million which is a 15% increase compared to the corresponding period. This increase is primarily due to a 32% increase in branch network and a 31% increase in employees compared to the corresponding period in 2012. The branch network at the end of the quarter was 45.

Net Interest Income of the Group recorded a 28% growth due to the progress of the bank's subsidiary UB Finance. This also had a favourable impact on the Total Operating Income.