ECONOMYNEXT- Profits at Sri Lanka’s Union Bank of Colombo (UBC) group fell 24 percent to 182 million rupees from a year earlier with a fall in net interest income, interim accounts showed, while the bank said exchange rate problems had hit Treasury income.
Earnings per share for the quarter was 17 cents for the group, which includes the bank and two subsidiary non-bank finance firms. For the nine months to September the group reported earnings of 61 cents per share on total profits of 665 million rupees, which grew 14 percent.
The UBC share closed trading flat at 12.10 cents on Friday (29).
Interest income fell 20 percent to 2.5 billion rupees, interest expense fell 32 percent to 1.3 billion rupees, but net interest income also fall 2 percent to 1.1 billion rupees.
“The Net Interest Income (NII) for the 3rd quarter was impacted by the adverse macro environment along with the Bank extending debt moratoria to support its customers during these tough times and intensified further by the significant drop in AWPLR by 280 basis points compared to the rates in 2020” the bank said.
“As a result, NII during the first nine months of the year was reported as 3,078 million rupees and was a marginal growth compared to last year.”
At group level, loans grew 3 percent at 75 billion rupees. At bank level also gross loans grew three percent to 69.7 billion rupees.
Bank-level non-performing loans had grown to 5.79 percent in September from 6.05 percent in December,2020.
Provisioning for bad loans fell 44 percent to 189.6 million rupees.
Net fee and commission income grew 16 percent to 233.4 million rupees.
“Amidst a challenging economic landscape, the Rupee continued to depreciate against the USD impacting trade income and affecting supply/demand dynamics,” the bank said.
“The Treasury performance was greatly impacted by this exchange rate volatility and the limited trading opportunities that depressed the Treasury and Trading markets income, which was comparatively very high in 2020- particularly in the 2nd and 3rd quarters. Consequently, Trade and Other income of the Bank declined by 37 percent YoY.”
The bank’s total assets were 125.1 billion rupees at end-September, down 3 percent from the start of the financial year and end-December.
The bank-level capital adequacy fell to 15.20 percent from 16.95 percent, remaining above the regulatory minimum of 12.5 percent.
And the total Capital ratio was 10.44 percent up from 10.23 percent. (Colombo/Nov01/2021)