Union Bank records strong growth of 52% in pre-tax profit in 1H19
View(s):Union Bank concluded a strong first half, recording significant growth in core banking revenue with resultant profits before all taxes of Rs. 849 million, amidst challenging market conditions that tested the resilience of businesses across all sectors.
The second quarter of 2019 carried unforeseen challenges for the banking sector, which was under demanding economic conditions caused by the unfortunate events that unfolded in April 2019, the bank said in a media release.
Despite a very challenging macro environment, Union Bank reported healthy core banking growth with Net Interest Income (NII) significantly increasing by 19 per cent YoY, to Rs.2,131 million. Net Interest Margin of the bank improved to 3.4 per cent from 3.1 per cent in the comparative quarter, mainly due to the increase in average CASA balances during the reporting period.
Income from capital gains for the period was Rs. 253 million while income from investments in units for the period was Rs.123 million.
“The decline in other operating income was mainly due to the reduction in foreign exchange business income which was approximately 50 per cent of the income reported during the corresponding period last year. This was mainly due to a significant reduction in trade business stemming from the macro economic challenges of the quarter,” the bank said.
Profit after Tax (PAT) for the period was Rs.297 million, up by 18 per cent YoY. PAT of the bank was significantly affected by the increase in tax rates which increased to 70 per cent compared to 59 per cent in the comparative period.