Sri Lanka’s Union Bank net up in June quarter amid loan growth

ECONOMYEXT – Profits at Sri Lanka’s Union Bank of Colombo rose 302 percent to 36.2 million rupees in the June 2015 quarter helped by falling interest costs, strong loan growth and reduced loan loss provisions, interim accounts showed.
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The lender reported earnings of 03 cents per share for the quarter. In the 6-months to June it reported earnings of 06 cents per share on total profits of 68 million rupees, up 146 percent from a year earlier.
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Chief Executive Indrajit Wickramasinghe said the bank the bank restructured in the first half and expects to maintain its growth momentum.
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Loans grew 26 percent to 36 billion rupees in the 6-months to June, with cash holdings falling 73 percent from 13 billion rupees to 3.4 billion rupees. Other financial assets held for trading more than doubled to 4.09 billion rupees by end June from 1.9 billion rupees in December.
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Financial Investments available for sale rose to 7.7 billion rupees from 1.8 billion rupees. Interest margins had narrowed to 3.97 percent from 4.20 percent.
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Deposits grew 20 percent to 37.6 billion rupees.
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In the June quarter, group interest income rose 7 percent from a year earlier to 1.1 billion rupees on the back of loan growth but interest expenses fell 16 percent to 536 million rupees amid falling rates, boosting net interest income 43 percent to 614 million rupees.
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Fee and commission income was flat at 82 million rupees. Loan loss provisions fell to 59 million rupees with collective provisions falling from 133 million rupees to 17 million rupees.
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Group gross assets grew 14 percent to 59.8 billion rupees and net assets was flat at 16.5 billion rupees.
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At banks level core capital was 15.3 billion rupees giving a ratio of 33.2 percent, sharply higher than regulatory requirements, thought down from 41 percent in December amid loan growth.
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The gross non-performing loans ration also fell to 4.8 percent from 8.25 percent.
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