Sri Lanka Union Bank to broad base business with retail focus
EconomyNext – The Union Bank of Colombo PLC (UBC) plans to broad base its business beyond small businesses this year, developing retail and corporate segments, its new chairman P. Jayendra Nayak has said.
He said the bank is well positioned for growth with the buyout last year by private equity fund, TPG Capital Management LP, through its affiliate Culture Financial Holdings Ltd.
The investment in September 2014 of 11.4 billion rupees in what was billed as the country’s biggest buyout deal gave Culture Financial Holdings a 70 percent stake in Union Bank.
"Capital is like oxygen to banks, enabling them to breathe deeply in envisioning
and planning for their next stage of growth," Nayak told shareholders in the bank’s just released annual report.
TPG’s investment in the bank, which makes UBC the fifth best capitalised private commercial bank in the country, "should have a favourable impact on the bank’s credit
rating and open access to longer-term lower-cost funding," Nayak said.
"Having evolved from being a preferred SME bank in recent years, the bank’s business is expected to be more broad based in the future, by developing our retail and corporate business segments as well, without however diluting the thrust on financing SMEs," .
But he said UBC will continues the focus on meeting the funding needs of good quality small and medium enterprises despite the bank becoming more diversified in its businesses.
UBC’s forward plan for retail banking entails repositioning the UBC brand to "out grow" its SME focus and gain wider focus on the retail sector by increasing its presence through enhanced ATM access and online banking.
Nayak said the installation of a new core banking software called Silverlake at UBC would help its retail banking thrust by centralising several transaction processes and reducing transaction costs.