Union Bank, has announced its results for the period ended 30th Sept. 2008, which reveal commendable growth in both deposits and advances, with a growth of 15% in deposits, from Rs. 8.93 b in Sept. 2007 to Rs. 10.31b in Sept. 2008, and a growth in advances of 30%, from Rs. 6.15b in Sept. 2007 to Rs. 8.00b in Sept. 2008. For this comparative period, the industry had grown only by about 5.2% in deposits and 3.9% in advances. The Bank's net NPL ratio is perhaps the lowest in the industry, at 3.17%.

Commenting on the exceptional growth, the Bank's Director/CEO, Mahendra Fernando, said, “We are naturally very pleased with the growth in the two main categories of business development, which have been achieved against the backdrop of a marked slowing-down of the financial services industry due to the global meltdown and the prevalent policies locally which have been prompted by high inflation and borrowing costs. The Bank's assets and liabilities were grown in keeping with a business model which is pivotal on not exposing the bank to significant risks in a market which is now encountering much higher incidence of NPLs compared to the same period last year (according to CBSL, NPLs for the entirety of 2007 increased by 6.5b, whereas for the first nine months of 2008, it has increased by Rs. 21.2b), and we are extremely pleased that because all our lending activities which have been evaluated with the Bank's ultimate safety in mind, and not in the interest of short term gains, Union Bank is able to declare the lowest non-performing ratio amongst all commercial banks. We are especially proud of this because not too long ago when we took over the management of this bank, its NPL ratio was hovering around 32%”.

The Bank's Pre-Tax profit increased by 58% over the corresponding period last year, and reached Rs. 79.79mn, which was facilitated by a growth of 52% in net interest income and a growth of 18% in other income. Post-tax profit grew by 19% to Rs. 25.3mn.

Non-interest expenses recorded an increase of 32% over the corresponding period last year, reaching Rs. 281.97mn, which was mainly due to the significant increase in business volumes.

The Bank's income for the nine months of 2008 grew by 50% to Rs.1,376mn. The growth in earnings has been mainly due to interest income increasing to Rs. 1,251mn compared to Rs. 809mn for the previous period.

Total shareholder funds increased by Rs.78mn, from Rs.1,330mn in 2007 to Rs.1,408mn in Sept. 2008 and the Bank's capital adequacy ratio is at 13.68% despite the growth in loans and advances.

“We are very alive to the particular challenges that the market poses at this time, since the debt servicing capacity of borrowers in general are strained by global conditions as well as high inflation and high borrowing costs, and the savings capacity of people too are greatly reduced, but we are firmly committed to the business plan that we have for this bank. Our new branches which have come on stream late last year and early this year, have proven through their quick successes that Union Bank holds a distinct appeal for clients who require personalized care. We look forward with zest to meeting the inevitable challenges that are ahead in these turbulent times,” Fernando concluded.