Union Bank achieves top pre-tax profit in 9-mth 2018
Union Bank Group crossed Rs. 1 billion in pre-tax profit for the nine months to September 2018 with the bank recording an impressive pre-tax profit of Rs. 921million, a 37 per cent growth YoY.
Focused revenue management using portfolio re-alignment within and across business units resulted in a 17 per cent YoY growth in Net Interest Income (NII) which was Rs.2,722 million during the period ending September 30 despite the narrowing margins due to market fluctuations.
In a media release the banking group said the fee and commission income of the bank continued to improve through the key enablers articulated in the business strategy. Net fee and commission income grew by 21 per cent YoY to Rs.600 million during the period under review. The growth is mainly attributed to fees on loans and deposits.
Capital gains from Government securities for the period was Rs. 207 million, which fell by 8 per cent YoY.
The growth in the other operating income was mainly contributed by foreign exchange income which was Rs. 209 million, a 61 per cent increase YoY. This is mainly due to increased customer transactions.
Post-tax profit (PAT) was Rs. 390 million, up by 14 per cent YoY. The bank’s PAT continued to be impacted due to higher effective tax rates as a result of the implementation of the new Inland Revenue Act. Overall taxes have increased by 62 per cent YoY.
The SME banking portfolio stood at Rs. 23,317 million amidst a slowdown in credit growth. The bank said it continued to focus growth segments in the SME sector supported by a customised strategy for key market segments.
The Retail Banking portfolio continued to expand during the period under review with the retail deposits base growing to Rs. 48,710 million, up by 15 per cent YoY.
“The Treasury made notable contributions to the bank’s bottom line during the period under review. In a backdrop where financial markets experienced liquidity shortages and extreme volatility resulting fluctuations in Dollar/Rupee premiums, the Treasury generated higher FX Revenues by timely exploiting market opportunities in Swap, outright and customer positions. In addition Treasury also recorded higher capital gains through bond trading,” the release said.
Commenting on the performance of the Bank as at the end of 3Q 2018, Union Bank’s Director/Chief Executive Officer Indrajit Wickramasinghe said, “This consistent growth trajectory is an affirmation of the success of the bank’s midterm strategic initiatives for accelerated growth. Clear focus, strategic realignment and commitment has enabled the bank to record an impressive performance amidst a challenging business environment. We will continue to enhance operational efficiencies in all key areas and align our subsidiaries to support the overall growth momentum.”