Strong 2019 performance from Union Bank, just as it marks 25 years
View(s):Union Bank has demonstrated a healthy performance amidst the challenging macro-economic environment in 2019, recording a significant increase of 50 per cent in profit after all tax, going into its 25th year in 2020.
Amidst sector shocks that prevailed throughout, the bank strived for revenue optimisation through portfolio re-alignment and prudent cost management. During the year, the bank had paid 66 per cent of its profits as taxes which was over Rs.1 billion, it said in a media release.
Despite market challenges, the core banking operations of the bank performed consistently on the back of focused strategic initiatives implemented across Corporate, SME and Retail Banking segments, supported by an impressive Treasury performance. As a result of well- managed core banking operations, the Net Interest Income (NII) of the bank grew significantly to Rs. 4,479 million, YoY growth of 22.6 per cent.
Despite policy rate revisions, the demand for credit to the private sector remained subdued, affecting the balance sheet growth. Bank loans and advances stood at Rs. 77,358 million, a 4.9 per cent increase from 2018.
Reflecting the macro-economic challenges, the bank’s non-performing loans (NPL) ratio increased to 5.03 per cent in 2019 in tandem with the increase of NPL ratios within the banking industry. The SME banking segment showed the highest deterioration of NPL ratios during the year, the release said.
Commenting on Union Bank 2019 performance Director/ CEO Indrajit Wickremasinghe said, “Amidst many macro-economic challenges, the bank had improved its core banking growth with focus on interest income, portfolio realignment and prudent cost management, reporting a resultant rise in profits.”