Sri Lanka’s Union Bank profits rise in Dec on lower bad loan provisions
ECONOMYNEXT- Profits at Sri Lanka’s Union Bank of Colombo (UBC) group grew 111 percent to 196 million rupees in the December quarter on lower bad loan provisioning, interim accounts showed.
The group, which includes the bank and two subsidiary non-bank finance firms, reported earnings per share of 18 cents for the quarter.
For the twelve months to December, the group reported earnings of 70 cents per share on total profits of 765 million rupees, which grew 48 percent.
The UBC share last traded at 11.30 rupees on Friday, down 40 cents.
The group’s gross income for the quarter fell 7 percent from a year earlier to 3.94 billion rupees.
Interest income fell 6 percent to 3.48 billion rupees amid central bank price controls on loans, while interest expenses fell 12 percent to 2.28 billion rupees on realignment of deposits, leading to net interest income to expand 7 percent to 1.2 billion rupees.
At group level, loans grew 3 percent to 84.78 billion rupees.
Bank-level non-performing loans had grown to 5.03 percent in December from 3.68 percent a year earlier on the rise of small and medium size enterprise customers.
Group provisioning for bad loans fell 52 percent to 78.3 million rupees.
Deposits fell 4 percent to 82.7 billion rupees
Net fee and commission income fell 1 percent to 257.7 million rupees.
Other operating income of the group fell 86 percent to 17.1 million rupees due to low foreign exchange gains.
Total assets fell 4 percent to 129.8 billion rupees.
The group reported net assets per share of 15.87 rupees, up from 14.90 rupees
Group Tier 1 capital adequacy fell to 16.12 percent from 16.47 percent against a minimum requirement of 8.5 percent.
Total capital adequacy fell to 16.36 percent from 16.47 percent against a required 12.5 percent.
Return on assets at bank-level fell to 0.57 percent from 0.39 percent, while return on equity grew to 4.16 percent from 2.74 percent. (Colombo/Feb 28/2020)