Union Bank records healthy 49% growth pre-tax profit in 1Q19

Union Bank has posted significant growth in its core banking operations reflecting a 62 per cent Year on Year (YoY) growth in profits from operating activities to Rs.362 million during the 1st quarter of 2019.

This was despite the continuously challenging macroeconomic backdrop which had been affecting the industry over the past few quarters. Union Bank recorded an impressive profit before all taxes of Rs. 366 million, a 49 per cent growth YoY for the period ended March 2019, highlighting the bank’s continued performance and progress towards achieving its strategic growth objectives for the year, it said in a media release.

Continuous focus on revenue optimisation through portfolio re-alignment within and across business units resulted in a 19 per cent YoY growth in Net Interest Income (NII) which was Rs.1,013 million during the period ended 31st March despite the increase in cost of deposits.

Fee and commission income grew by 19 per cent YoY to Rs.266 million during the period under review. Capital gains from government securities for the period were Rs. 71 million which was a 23 per cent increase YoY. Foreign exchange income for the period showed a 71 per cent decline YoY, as a result of revaluation due to the appreciation of the value of the Sri Lankan Rupee.

Profit after Tax (PAT) for the period was affected by the significant increase in the effective tax rate. The effective tax rate for the quarter was 72 per cent compared to 52 per cent in the comparative period.

Commenting on the 1st quarter performance of the Bank, Union Bank’s Director/ CEO Indrajit Wickramasinghe said, “We have got a very positive start to the year 2019 with significant growth in the core banking operations. However the macro environmental conditions are very challenging which will have an impact going forward. We will continue to build on this solid foundation, with focused efforts in expanding our business growth in the identified key strategic business pillars”.