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Union Assurance strengthens its strategic partnership with Union Bank to expand Bancassurance operations

Union Assurance strengthens its strategic partnership with Union Bank to expand Bancassurance operations

Union Assurance (UA) recently partnered with Union bank for a preferred partnership in Bancassurance operations with the objective of strategically strengthening its Bancassurance channel and to provide life insurance solutions to the extensive customer network of the Bank. Signing of the agreement was held at the Hilton Residencies in Colombo on 19th October 2018 amidst a large gathering from both organizations.

Union Assurance is well established entity within the Life Insurance industry with an array of innovative, tailor made life insurance solutions to suit any lifestyle requirement. The experience the company has gained while continuing its operations for more than 30 years has made it possible to protect and safeguard lives and livelihoods across Sri Lanka.

The Bancassurance distribution channel at Union Assurance has grown over the years to become the largest bancassurance operation in Sri Lanka covering over 500 bank branches of five leading bank partners. Through this MOU, Union Bancassurance will be able to expand its reach and make a positive impact in the lives of a wider group of individuals.

Mr. Indrajit Wickramasinghe, Director / Chief Executive Officer of Union Bank expressed his views on this partnership “We are pleased to enter into a preferred bancassurance partnership with Union Assurance who also places the same importance on serving the people with the best solutions and services that they could offer to empower and enrich their lives. This strategic partnership will help both entities to grow together which will lead to a strong partnership”

Mr. Dirk Pereira, Director / Chief Executive Officer of Union Assurance PLC sharing his thoughts expressed that “As a pioneer in the bancassurance field, this partnership will help us to have a strong corporate relationship with the Bank and will also assist us to reach out to diversified customer segments to provide them with the best array of Life Insurance solutions and develop new relationships in untapped markets. The constantly evolving structure of our product portfolio and service models will help us set new standards in the industry which will benefit both organisations and their stakeholders.”

Union Bank is amongst the top 5 private commercial Banks in Sri Lanka in terms of market capitalization and is an innovation driven and strategically focused banking solutions provider.

The preferred partnership is a mutually beneficial agreement that allows Union bank to provide one stop financial solutions for its customers across the branch network, while allowing Union Assurance to tap into a wider customer base providing them with an industry leading customer service standard.

Union Assurance is one of Sri Lanka’s largest providers of life insurance solutions in the country backed by the strength and stability of one of Sri Lanka’s largest conglomerates–John Keells Holdings PLC. Celebrating over 30 years of excellence, Union Assurance continues to invest in people, products and processes to become a trustworthy life changing partner in success for all stakeholders. Bancassurance being one of UA’s diversified sales channels consists of a team of experienced, dynamic and outstanding professionals powered with the latest technology to provide a convenient and trusted service for its customers.

Union Bank wins award for “Best Bank for seamless back-end operations” at the LankaPay Technnovation Awards 2018

Union Bank wins award for “Best Bank for seamless back-end operations” at the LankaPay Technnovation Awards 2018

Photo caption: Standing L to R : Manisha Fernando- AVP Retail Liability Products and Alternate Channels Union Bank , Yohan Alahakoon- Manager Alternate Channels Union Bank, Wasantha Deshapriya – Chairman of the Panel of Judges and Former Secretary, Ministry of Telecommunication and Digital Infrastructure and Foreign Employment , Dharmasiri Kumaratunge – Director Payments and Settlement Department Central Bank, Anil Amarasuriya Chairman LankaClear, Channa De Silva General Manager/Chief Executive Officer LankaClear.

Union Bank was recognised for its seamless back-end operations at the LankaPay Technnovation Awards 2018 held recently at Shangri-La Hotel Colombo. The award is yet another testament to the bank’s ongoing commitment to technological enhancements for speedy and fast delivery of services to customers and end users. The award was bestowed based on the bank’s exceptional capabilities in, timely delivery, connectivity uptime, business focus, processes and mechanisms related to the product lines.

Commenting on this outstanding achievement, Vice President – Retail Banking of Union Bank, Mrs. Chaya Jayawardena said “We are delighted to be awarded this title. This pays off all the hard work put in by the employees in ensuring the back end operations takes place seamlessly in ensuring the end user is delighted. Digital banking means more than just going paperless. As one of the fastest growing commercial banks in the country, we always believe in offering improved customer experience and delivering faster and more efficient services.”

ATMs have been an important touch point between banks and their customers, providing convenience of 24/7 self-service transactions. As a part of its growth strategy, Union Bank has made significant investments to agile through developing technologies offering customer convenience and ease-of-transaction for its growing base of clients. Powered by a common ATM switch by LankaClear increasing the efficiency of payment management such as CEFTS and SLIPS, focused expansion of its remote ATM network, rolling out of an enhanced digital banking platform, educating the remote communities through collaborated road shows and customization of cash management services are some of such major steps taken by Union Bank to improve its product and service delivery across all customer segments

Union Bank records 42% growth in Profit Before all Taxes

Union Bank records 42% growth in Profit Before all Taxes

Bank Performance

  • Gross Income grew by 22% YoY to Rs.6,721 Mn
  • Profit Before Tax and VAT grew by 42% YoY to Rs.558 Mn
  • Net Interest Income grew by 14% YoY to Rs.1,785 Mn
  • Net Fee and Commission Income grew by 21% YoY to Rs.385 Mn
  • Total Capital Adequacy Ratio was 19.36%

Group Performance

  • Gross Income grew by 21% YoY to Rs.7,799 Mn
  • Profit Before Tax and VAT grew by 35% YoY to Rs.670 Mn
  • Net Interest Income grew by 17% YoY to Rs.2,191 Mn
  • Net Fee and Commission Income grew by 16% YoY to Rs.455 Mn

Union Bank recorded an impressive Profit Before Tax and VAT of Rs.558 Mn, led by core banking growth that reported a 42% growth YoY for the period ending 30th June; further consolidating its growth prospects for the year.

Core Banking Growth and Profitability

Continuous growth in core banking operations contributed to the healthy performance during the period under review. Focused revenue management using portfolio realignment within and across the business units resulted in a 14% YoY growth in Net Interest Income (NII) which recorded Rs.1,785Mn during the period ended 30th June. Both Net Interest Margins (NIM) and spreads depicted an improvement during the reporting period in comparison to FY 2017. This was despite the withdrawal of the notional tax credit which bears a direct impact on the interest income earned on the Government securities portfolio carried prior to the change in the tax regulations.

The fee and commission income of the Bank continued to improve through the key enablers articulated in the business strategy. Fee and commission income grew by 21% YoY to Rs.447 Mn during the period under review. Growth was mainly attributable to processing fees on an expanding loan book, commission on guarantees and CASA related fees.

Net trading and other income grew to Rs.405 Mn during the period under review. A strong performance by the Treasury function resulted in capital gains of Rs.142 Mn in comparison to Rs.99Mn reported in the corresponding period last year, which translated to a 44% growth YoY. Income from units was Rs.154 Mn. The Bank has no exposure to trading equities and has not invested in equity funds as at the reporting date.

Total Operating Income of the Bank rose to Rs.2,575 Mn, and represented a growth of 22% YoY. Total Operating Expenses, on the other hand, were well managed and grew only by 17% YoY to Rs.1,899 Mn during the period.

Pre-impairment profits of the Bank was Rs.677 Mn which was a 37% increase YoY. The impairment charge of the Bank was Rs.158 Mn which was only a 20% increase YoY. This contributed to a strong 42% growth in Results from Operating Activities to Rs.518 Mn. Reflecting consistent performance across the group, share of profits from subsidiaries too grew by 36%.

Profit after Tax (PAT) for the period was Rs.253 Mn and represented a 22% growth YoY. PAT was adversely impacted due to the changes in the tax regulations subsequent to the New Inland Revenue Act enforcement. Effective tax rate for the quarter increased significantly in comparison to 1st quarter. This is mainly due to the withdrawal of tax exemptions on profits made out of SLDB and Corporate Debt Instruments invested prior to the tax changes and withdrawal in the notional tax credits.

The Bank’s loans and receivables stood at Rs.72,241 Mn while the deposits base was Rs.69,824 Mn as at June 2018. The Bank’s focus on asset quality continued through a robust risk management frame work and the implementation of rigorous risk management practices. The net NPL ratio of the Bank was 2.07% at the end of the reporting period.

Total CASA (Current and Savings Accounts) grew to Rs.15,798 Mn which translated to an increase of Rs.1,282 Mn over the 1st Half of 2017. The impressive CASA growth that outperformed the market growth rate, was enabled by focused CASA acquisition strategies driven by the Retail, SME and Corporate Banking segments.

The Bank continued to maintain its robust Capital Adequacy, reporting a Total Capital Ratio of 19.36% as at the balance sheet date.

Despite the challenging macro environment, the Group consisting of the Bank and its two subsidiaries, UB Finance Company Limited and National Asset Management Limited reported a Profit before all taxes of Rs.670 Mn for the period which was a growth of 35% YoY. Total assets of the Group was Rs.123,162 Mn of which 93% was represented by the Bank. The Group maintained a healthy Core Capital Ratio of 18.93% as at the balance sheet date.

Business Performance and Strategic Enablers

The Corporate Banking portfolio of the Bank continued to expand during the period under review with an YTD corporate loans portfolio growth of 7%. The premier cash management solution of the Bank, Union Bank Biz Direct continued to strengthen the corporate banking proposition of the Bank by garnering the trust and confidence of some of the top corporates in the country through customised cash management solutions while supporting the portfolio expansion through CASA and fee income growth.

The SME Banking portfolio of the bank continued to grow, aided by greater portfolio rationalisation and better customer segmentation. In line with its commitment to empower and deliver enhanced value to this vital sector, the Bank introduced a range of value added products and services under the proposition themed ‘Union Bank Biz Partner’. The proposition is linked to the business savings/current account relationship of a client and is offered in three distinctive tiers based on the balance maintained in the respective savings or current account. The three tiers namely, Gold, Platinum and Signature offer unique, customised benefits that include preferential tariffs, special interest rates on fixed/savings deposits, tailor-made banking solutions to meet specific business requirements, special fee waivers on business banking services such as telegraphic transfers, letters of credit, import collection bills and foreign exchange transactions as well as dedicated Account Relationship Manager (ARM) services along with affordable access to Union Bank’s exclusive transaction banking technology. While creating value and giving due recognition to the SME clients of the Bank, this enhanced range of services is expected to enable better relationship management with this nationally significant client segment. Union Bank Biz Partner has been well accepted by SMEs and have shown positive returns during the first six months of its launch, enabling the Bank to on-board a sizable number of mid- tier of SMEs.

The retail banking portfolio continued to be strengthened during the period under review with the retail deposits base growing to Rs.45,388 Mn. A focused strategy with enhanced relationship management on identified segments along with aggressive sales efforts refocusing on segment based products enabled the deposits growth. Continuing to instill the habit of savings and encouraging customers to grow their savings for greater stability the Bank once again conducted the ‘Kalin Avurudu Ganu-Denu’ promotion in April 2018. With enhanced emphasis been placed on mortgage backed lending, the retail loans portfolio of the Bank which consists of Personal Loans, Home Loans and Loans against Property recorded a steady growth during the period under review.

The Treasury which consists of Interbank, Fixed Income and Corporate Sales desks continued to perform well above expectations, making significant contributions to the Bank’s bottom line.

Commenting on the 1st half performance of the Bank, Union Bank’s Director/CEO Mr. Indrajit Wickramasinghe said, “The Bank has continued on its steady growth trajectory within the 1st half 2018, recording noteworthy performance in all its key business and profitability growth areas. We will continue to build on this enhanced momentum to reach the envisioned growth objectives of the year, in line with the three-year strategic growth plan set in motion by the Bank at the beginning of this year.”

Union Bank hosts Investor Forum for 1H 2018

Union Bank hosts Investor Forum for 1H 2018
  • Director/ CEO of Union Bank Indrajit Wickramasinghe addressing the audience
  • The members at the head table (from L-R) : Mr. Atul Malik – Chairman of Union Bank, Mr. Indrajit Wickramasinghe – Director/CEO and Mr. Malinda Samaratunga – CFO of Union Bank
  • Union Bank conducted an Investor Forum on the Bank’s transformational journey and financial performance for the first half of 2018 at the Hilton Colombo recently with the participation and representation of the investment community of Sri Lanka. Leading stockbrokers, financial analysts, venture capitalists and investment advisors were among the distinguished addressees at the well-attended event.

    The event was preceded by Union Bank Chairman Atul Malik, Union Bank Director Trehan Gaurav, Union Bank Director/Chief Executive Officer, Indrajit Wickramasinghe, Union Bank Chief Financial Officer Malinda Samaratunga and members of the Bank’s leadership team.

    CEO Mr. Indrajit Wickramasinghe sharing his views on the performance of the Bank mentioned that the Bank has embarked on a transformational journey since the landmark investment by TPG Capital in 2014. Mr. Wickramasinghe presented the Bank’s successful journey of growth during the past four years, drawing attention to the post-acquisition achievements that include successful transformation to a fully-fledged commercial bank, sound growth from a well-diversified core banking base, technological value additions, centralised and streamlined operations as well as a honed human capital base.

    Addressing the forum, he cited that strong capitalisation, robust risk management, superior asset quality, and sound corporate governance as the key strengths of the Bank. Mr. Wickramasinghe went on to elaborate on the future growth strategy of the Bank, affirming its commitment to continue along the sustainable growth mode that the Bank has now entered into, with a new three year strategic plan set in motion at the beginning of 2018. He mentioned that focus on consumer and SME banking, profitable growth, channel optimisation, economies of scale, portfolio acquisition and the growth of ROE and ROA will be the key pillars of focus of the Bank’s strategy for the next three years.

    Presenting the financial results of the Bank for the first half of 2018, Mr. Wickramasinghe expressed confidence in the Bank being driven towards enhanced performance during the year 2018, reaching key milestones in business volumes and enhancing returns.

    About Union Bank

    With a solid foundation etched with financial stability and international know-how, Union Bank is amongst the highest capitalised private commercial banks in Sri Lanka, offering a full range of products and services to personal and commercial financial sectors.

    Union Bank records 37% growth in PAT in 1Q18

    Union Bank records 37% growth in PAT in 1Q18

    Bank Performance

    • Gross Income grew by 29% YoY to Rs 3,367 Mn
    • Profit Before Tax and VAT grew by 47% YoY to Rs 246 Mn
    • Net Interest Income grew by 11% YoY to Rs 853 Mn
    • Net Fee and Commission Income grew by 19% YoY to Rs 197 Mn
    • Total Capital Adequacy Ratio was 19.9%

    Group Performance

    • Gross Income grew by 26% YoY to Rs 3,899 Mn
    • Profit Before Tax and VAT grew by 38% YoY to Rs 307 Mn
    • Net Interest Income grew by 13% YoY to Rs 1,041 Mn
    • Net Fee and Commission Income grew by 16% YoY to Rs 238 Mn

    Union Bank recorded an impressive Profit Before Tax and VAT of Rs 246 Mn, reporting a 47% growth YoY, thus setting the pace for its next growth phase powered by a new three – year growth strategy which includes its subsidiaries.

    Core Banking Growth and Profitability

    A significant growth in core banking operations contributed to the robust performance of the Bank during the period under review, while prudent cost and revenue management drove growth in profits over the corresponding period in 2017. In a clear reflection of a strong core banking performance over the last 12 months, the Bank’s loan portfolio grew by 16% YoY while the total deposits grew by 21% YoY.

    A focused management of yields saw Net Interest Income (NII) of the Bank record Rs 853 Mn during the quarter ended 31st March, which translated to an 11% increase YoY. Both Net Interest Margins (NIM) and spreads showed a marked improvement during the reporting period in 2018 compared to the last quarter of 2017. NIM for the quarter under review would have seen a higher growth if not for the interest expense on investments in units, the income in respect of which has been recognized as a capital gain under trading income.

    The Bank continued to make significant efforts to improve its fee and commission income using the key enablers articulated in its strategy. Fee and commission income which mainly comprises of deposit related fees, trade and remittances, loans, cards and other fees increased by 18% to Rs 224 Mn, as against Rs 191 Mn recorded during the corresponding period in 2017. Overall, the growth in fees was mainly a result of processing fees on an expanding loan book and CASA related fees.

    Net trading and other income was reported at Rs 221 Mn for the quarter under review. A strong performance by the Treasury function resulted in capital gains of Rs 69 Mn in comparison to Rs 11 Mn reported in the corresponding period last year. Income from investments in units recorded a noteworthy growth of Rs 62 Mn following increased investments in units. The Bank has no exposure to trading equities and has not invested in equity funds as at the reporting date.

    Stemming from the overall growth in core banking activities and fuelled by the new three-year growth strategy, Total Operating Income of the Bank rose to Rs 271 Mn, and represented a sharp increase of 26% YoY. Total Operating Expenses on the other hand were well managed and increased by 22% YoY to Rs 938 Mn during the quarter, as against Rs 771 Mn reported in the corresponding period in 2017. Pre-impairment profits of the Bank was Rs 333 Mn and reported a 39% increase YoY. The impairment charge of the Bank was Rs 109 Mn which was a 17% increase YoY.

    Profit after Tax (PAT) for the 1st quarter of 2018 was Rs 130 Mn and represented a 37% increase YoY.

    The Bank’s loans and receivables stood at Rs 70,736 Mn while the deposits base was Rs 69,038 Mn at the end of the quarter. With the repositioning in 2014, the Bank has continuously improved its asset quality through a robust risk management frame work and the implementation of rigorous risk management practices that include stringent appraisal processes, strong collections efforts and risk based pricing. The gross NPL Ratio of the Bank was 3% at the end of the quarter.

    Total CASA grew to Rs 16,523 Mn which translated to an increase of Rs 3,441 Mn over the 1st quarter of 2017. The impressive CASA growth that outperformed the market growth rate, was enabled by focused CASA acquisition strategies driven by the Retail, SME and Corporate Banking segments.

    The Bank continued to maintain its robust Capital Adequacy, reporting a Total Capital Ratio of 19.9% as at the balance sheet date.

    The Group, consisting of the Bank and its two subsidiaries, UB Finance Company Limited and National Asset Management Limited reported a PAT of Rs 154 Mn for the quarter which was a growth of 28% YoY, supported by a total operating income growth of 22% YoY. Total assets of the Group was Rs 123,883 Mn, of which 93% was represented by the Bank. The Group maintained a healthy Core Capital Ratio of 19.3% as at the balance sheet date.

    Business Performance and Strategic Enablers

    Propelled by the 3 year growth strategy, the Corporate Banking portfolio recorded a notable performance in the quarter under review. The corporate loans portfolio expanded by 15% YoY, while the deposits base of the corporate banking segment increased by a significant 22% YoY. Corporate Banking continued to deliver enhanced customer value by offering a comprehensive product package supplemented by Union Bank Biz Direct – the state of the art transaction banking solutions platform which is now extended with customized cash management possibilities for leading corporates in the country.

    The SME Banking portfolio set off on a continued growth phase in the 1st quarter of 2018 recording a SME loan book growth of 6% YoY, on the back of a new strategic lending approach that focused on strategically important industries and geographic regions. Within the period under review, the Bank introduced Union Bank Biz Partner, a status banking proposition designed to empower the Bank’s SME clientele with exclusive benefits and convenience whilst differentiating itself from the rest.
    The retail deposit base too grew notably in 1Q2018 supported by a focused strategy driven through identified key segments. An impressive YoY deposits growth of 32% was recorded under the retail segment.

    Amidst intense competition, retail banking accounted for 18% of the overall CASA growth of the Bank. The retail loan portfolio which consists of Personal Loans, Home Loans and Loans against Property recorded a remarkable growth of 90% YoY during the quarter under review.

    The Treasury which consists of Interbank, Fixed Income and Corporate Sales desks performed well above expectations making significant contributions to the Bank’s bottom line.

    The Bank was once again the first in the industry to release its Annual Report for the year 2017. Union Bank’s Annual Report 2017 was presented in February 2018, under the theme ‘Connect and Grow with us’- which signifies the Bank’s commitment to forge ahead as one of Sri Lanka’s fastest growing commercial banks, while building on the profound stakeholder relationships fostered over the years and leveraging on its strengths of a solid capital base, comprehensive product portfolio, an empowered team, technological finesse and operational efficiency to create sustainable growth opportunities for all stakeholders.
    Commenting on the 1st quarter performance of the Bank, Union Bank’s Director/CEO Mr. Indrajit Wickramasinghe said, “The Bank has set the pace for an excellent year of growth with an impressive first quarter performance in 2018 and we will continue to build on this strong balance sheet and profitability to accomplish our envisioned growth objectives for the year. Strengthened by its three-year growth strategy, Union Bank is now ready to take on the next phase of its expansion and growth.”

    Union Bank conducts breakfast forum for Elite Circle clients

    Union Bank conducts breakfast forum for Elite Circle clients

    Appearing in the photograph (from L to R); Mr. Suresh Perera conducting the discussion / a cross section of the participants / Mr. Udeani Alwattage leading a discussion on the Exchange Control Act of Sri Lanka.

    Union Bank hosted its Elite Circle clients to an exclusive breakfast forum at the Jetwing Colombo Seven recently. The event was received with great enthusiasm by the participants and was attended by over seventy five exclusive clients of the Bank.

    The breakfast forum led by two distinguished speakers, was held under the theme ‘Personal Taxation and highlights of the Exchange Control Act of Sri Lanka’. An informative presentation and discussion on Personal Taxation was conducted by Mr. Suresh Perera, Principal – Tax and Regulatory at KPMG Sri Lanka. Mr. Udeani Alawattage, Director – Department of Foreign Exchange of the Central Bank of Sri Lanka presented an insightful preview to the highlights of the recently updated Exchange Control Act of Sri Lanka. The interactive sessions imparted useful information and knowledge to the audience which comprised of an exclusive segment of high-net-worth clients.

    Union Bank Elite Circle signifies the pinnacle of relationship banking and is designed with the clients’ need for exclusivity in mind. Having understood the unique needs of this clientele, the Bank provides its Elite Circle clients with opportunities to gain first-hand knowledge on the latest developments in the financial services sector that would impact their wealth management decisions. The Bank also offers exclusive lifestyle privileges and experiences to its Elite Circle clientele, delivering an enhanced banking experience in recognition of their exclusive banking relationships.

    More information on Union Bank Elite Circle and its exclusive privileges may be accessed via the Bank’s corporate website unionb.com.

    Union Bank Unveils Early Avurudu Gift Offer

    Union Bank Unveils Early Avurudu Gift Offer

    Union Bank launched ‘Kalin Avurudu Ganudenu’, an early-bird offer of exciting gifts for savings; in preparation for the upcoming Sinhala and Tamil New Year.

    The gifts offer which commences on 25th March 2017 providing customers the opportunity and flexibility to save in slabs and collect valuable gifts at each threshold, while watching their savings balances grow. This year’s promotion has been further enhanced to offer a choice of gifts for selected savings slabs, making it an even more attractive gift offer for customers.

    The gifts will be offered for new deposits made to existing and new Savings/Current accounts. The tiered gift structure include a travelling bag for deposits above Rs.10,000/-, an electric kettle for deposits above Rs.50,000/-, a choice between a Bluetooth speaker, pop-up toaster or a mobile power bank for deposits above Rs.100,000/-, a choice of attractive gifts including a set of a gas cylinder and gas cooker or a food processor or a remote control stand fan for deposits above Rs.500,000/-. Deposits of Rs.1,000,000 and above will be eligible for an exclusive range of gifts that include a choice between LED TVs, mini bar refrigerators, Tabs or a kitchen utility set that includes a gas cylinder, two burner glass top gas cooker and a saucepan set.

    Union Bank offers a host of savings and deposit products, including Union Bank Ultrasaver and Union Bank Salary Power accounts designed to provide attractive returns and value added benefits for regular savers. This promotion would be an ideal opportunity to take advantage of these benefits while enjoying banking convenience and easy account access through the Bank’s island-wide network of 67 branches and the extended ATM network connected to over 4000 ATMs across the country through LankaPay.

    Union Bank also offers a novel banking experience through its Online Banking platform and the Mobile Banking app geared to meet the demanding lifestyle needs of its clients.

    The ‘Kalin Avurudu Ganudenu’ is a limited time offer and will be available only till stocks last. Customers could visit their nearest Union Bank branch or call the Bank’s 24-hour Contact Centre on 011 5 800 800 to avail of this offer.

    Union Bank records strong growth of profits to Rs.782 Mn from operating activities in FY2017

    Union Bank records strong growth of profits to Rs.782 Mn from operating activities in FY2017

    Bank Performance

    • Net Interest Income up 21.5% YoY to Rs. 3,046 Mn
    • Net Fee and Commission Income up 17.1% YoY to Rs. 673 Mn
    • Total Operating Income grew by 17.1% YoY to Rs. 4,376 Mn
    • Profits from Operating Activities grew by 35.6% YoY to Rs. 782 Mn
    • Total Assets grew by 28% YTD to Rs. 119,007 Mn
    • Net worth increased by Rs. 774 Mn YoY
    • Strong Balance Sheet with Total Capital Adequacy Ratio at 19%

    Group Performance

    • Net Interest Income up 22.6% YoY to Rs. 3,702 Mn
    • Net Fee and Commission Income up 11.5% YoY to Rs. 827 Mn
    • Total Operating Income grew by 14.9% YoY to Rs. 5,261 Mn
    • Profits from Operating Activities grew by 22.3% YoY to Rs. 1,026 Mn
    • Total Assets grew by 26.9% YTD to Rs. 127,601 Mn

    Despite the volatile macro environment, the Bank performed exceptionally well in 2017 resulting in a 35.6% increase in profits from operating activities to Rs. 782 Mn in comparison to Rs. 577 Mn recorded in 2016, while recording a profit before tax (PBT) of Rs. 534 Mn, a 23% growth YoY. Gross income of the Bank improved by 39.7% to Rs. 11,938 Mn in comparison to Rs.8,546 Mn recorded in 2016. Income growth of the Bank in 2017 was mainly driven by the core banking operations. This highlights the Bank’s continuing progress in its swift transition to a full-fledged commercial bank with a wider focus on Retail, Corporate and SME sectors. The impressive results, reflect the success of the rapid expansion initiatives implemented by the Bank following the capital infusion made in the latter part of 2014.

    Core Banking Growth and Profitability

    The net interest income of the Bank recorded Rs. 3,046 Mn during the year, significantly improving by Rs. 539 Mn which translates to an increase of 21.5%. The rise in net interest income was mainly driven by the balance sheet growth of the Bank. The Bank’s loans and receivables stood at Rs. 70,578 Mn as at end of 2017. This was a growth of Rs. 15,140 Mn which translated to a healthy increase of 27.3%. Composition of the loans and receivables of the Bank changed in line with the Bank’s strategy for the year.

    The Bank’s deposit mobilisation strategies yielded good results with the deposit base of the Bank standing at Rs. 70,326 Mn along with a growth of Rs. 18,484 Mn which is an impressive 35.7% increase in 2017. Much of this growth was steered by retail fixed deposit growth of Rs. 13,284 Mn, 58.7% growth over the previous year. The Bank continued to focus on CASA supported by several strategic initiatives such as the offsite ATM network, Debit Cards, sales force and enhanced brand awareness. CASA recorded Rs. 3,952 Mn growth which translated to 32.0% in comparison to 2016. CASA mix was at 23% in2017.

    The Bank has made significant efforts to improve its fee and commission income using the key enablers established during the current and the previous years. Fee and commission income which mainly comprised of deposit related fees, trade and remittances, loans, cards and other fees increased to Rs. 783 Mn, an increase of 17.4%. The Bank reported a net trading and other income of Rs. 656 Mn. This reflected a strong 35.0% growth in income to Rs. 335Mn in comparison to Rs. 248 Mn in 2016. The increase was mainly attributable to an increase in capital gains from trading

    Business Performance and Strategic Enablers

    The net interest income of the Bank recorded Rs. 3,046 Mn during the year, significantly improving by Rs. 539 Mn which translates to an increase of 21.5%. The rise in net interest income was mainly driven by the balance sheet growth of the Bank.

    The Bank’s loans and receivables stood at Rs. 70,578 Mn as at end of 2017. This was a growth of Rs. 15,140 Mn which translated to a healthy increase of 27.3%. Composition of the loans and receivables of the Bank changed in line with the Bank’s strategy for the year.

    The Bank’s deposit mobilisation strategies yielded good results with the deposit base of the Bank standing at Rs. 70,326 Mn along with a growth of Rs. 18,484 Mn which is an impressive 35.7% increase in 2017. Much of this growth was steered by retail fixed deposit growth of Rs. 13,284 Mn, 58.7% growth over the previous year. The Bank continued to focus on CASA supported by several strategic initiatives such as the offsite ATM network, Debit Cards, sales force and enhanced brand awareness. CASA recorded Rs. 3,952 Mn growth which translated to 32.0% in comparison to 2016. CASA mix was at 23% in 2017.

    The Bank has made significant efforts to improve its fee and commission income using the key enablers established during the current and the previous years. Fee and commission income which mainly comprised of deposit related fees, trade and remittances, loans, cards and other fees increased to Rs. 783 Mn, an increase of 17.4%.

    The Bank reported a net trading and other income of Rs. 656 Mn. This reflected a strong 35.0% growth in income to Rs. 335Mn in comparison to Rs. 248 Mn in 2016. The increase was mainly attributable to an increase in capital gains from trading securities. The Bank has no trading equities and has not invested in equity funds as of the Balance Sheet date. Reflecting the effectiveness of the strategies adopted, in a backdrop of testing market conditions the Bank recorded Rs. 4,376 Mn total operating income for the year. This increase of Rs. 638 Mn was a 17.1% growth YoY.

    The Bank has achieved a significant improvement in asset quality through the adoption of a robust risk management frame work and by implementing rigorous risk management practices including stringent appraisal processes, strong collection efforts and risk based pricing. The gross NPL Ratio was at 2.7% at year end.

    Operating expenses of the Bank was well managed and increased to Rs. 3,345 Mn during the year, as opposed to Rs. 3,008Mn in 2016, which is only an increase of 11.2%. This is in comparison to the total operating income increase of 17.1% during the same period.

    Total taxes for 2017 was Rs. 377 Mn, an 86.6% increase in comparison to 2016. Increase in VAT and NBT on financial services was due to the increase in VAT rate to 15% from 11%. Increase in Corporate tax was due to the increase in the taxable income as a proportion in comparison to 2016. Profit after taxes of the Bank for the year was Rs. 461 Mn. The YoY PAT growth at Bank level was affected due to significant one off income made in 2016 through its subsidiary UB Finance. Net assets value per share of the Bank improved to Rs. 16.36 from Rs. 15.65 in 2016. Total assets of the Bank grew by 28.0% to Rs. 119,007Mn in comparison to Rs. 93,009 Mn in 2016.

    The Bank maintained a robust Capital Adequacy Ratio throughout the year reporting 18.9% core capital ratio as at the year end.

    The Group, consisting of the Bank and its two subsidiaries, UB Finance Company Limited and National Asset Management Limited reported a PAT of Rs. 551 Mn in 2017 supported by total operating income growth of 14.9% YoY. Net asset value per share of the Group improved to Rs. 15.98 from Rs. 15.22 in 2016. Total assets of the Group grew by 26.9% YTD to Rs. 127,601Mn and the Group maintained a healthy Core Capital Ratio of 18.6% during the year under review.

    Operational Performance

    The year 2017 saw Union Bank further building on the strong fundamentals that were laid during the previous two years, to maintain its robust growth momentum despite the challenging macro- economic conditions that dominated the year.

    The Corporate Banking portfolio of the Bank recorded a notable performance in the year 2017, while delivering enhanced customer value by offering a comprehensive product package supplemented by Union Bank Biz Direct – a state of the art transaction banking and cash management solutions platform launched in 2016.

    The SME Banking portfolio of Union Bank recorded a steady growth in 2017 recording an expansion of 14%, on the back of a strategic lending approach focused on pre-identified industries and geographic regions. Although extreme climate conditions took a toll on a number of industries, timely intervention and preventive action ensured that the Bank was secured of possible portfolio losses.

    The retail deposit base of the Bank grew notably in 2017 on the back of a focused strategy driven through identified key segments. A YoY deposits growth of 54% was recorded under the retail segment with a heathy CASA mix of 20%. Amidst intense competition and increasing rate trends, Retail banking operations accounted for 39% of the overall CASA growth of the Bank. Localised consumer promotions played a pivotal role in driving the acquisition of low cost funds while the ‘Kalin Avurudu’ strategic savings campaign and five year fixed deposits campaign conducted in 2017 made significant contributions towards the Retail deposit growth.

    Debit Card issuance was made simpler in 2017 which resulted in an improved cross-sell ratio and a steady growth of the Bank’s Debit Card base. The Bank continued to offer value-added merchant offers to the debit cardholders resulting in better engagement, particularly during festive seasons. Marking a significant turning point in data security protection, in 2017 Union Bank became the first bank in Sri Lanka to receive the international Payment Card Industry Data Security Standard (PCI DSS)by the Security Standards Council.

    A healthy growth was recorded in the Union Bank Personal Loans portfolio, while Home Loans was further expanded in 2017 to accommodate condominium financing for pre-approved developers. To further strengthen the Bank’s asset product suite, Loan against Property (LAP) was introduced in 2017 to fulfill personal financial requirements of individuals by extending funds against the mortgage of an immovable property held as collateral.

    The Treasury which consists of Interbank, Fixed Income and Corporate Sales desks continued to make significant contributions to the Bank’s bottom line. Treasury Department of the Bank continued to act as the intermediary in facilitating funding and investing for the Bank’s Corporate, Retail and SME business units. Supported by market volatilities that prevailed throughout the year, trading on fixed income securities recorded a profit of Rs. 107.1 Mn and foreign exchange income of Rs. 79.1 Mn for the year 2017.

    The results also reflect the success of Union Bank’s expansion initiatives that gained further momentum in 2017, with its island-wide network increasing to 67 branches by the end of 2017. Continuing to deliver easy account access island-wide, The Bank’s ATM reach further expanded with the addition of new off-site ATM locations, sizing up the network of bank-owned ATMs to 124. In line with the Bank’s mandate to deliver greater banking convenience, 14 existing branches were remodeled and relocated, unveiling a new look and offering a redefined banking experience.

    In its efforts to offer a seamless banking experience to the Bank’s clients, Union Bank introduced an all new Mobile Banking app in the 3rd quarter of 2017. Earlier in 2017, the Bank introduced an ultra-modern online banking platform, and taking a step further the Bank enriched this online presence by extending it to Mobile Banking with more adoptability and flexibility to deliver ultimate convenience to its customers and non-customers alike.

    Union Bank brand made further progress on its position amongst LMD’s leading 100 brands in Sri Lanka, climbing 6 notches in its ranking in 2017. In recognition of its strong brand presence on social and digital media, Union Bank was conferred the title for ‘Best Facebook Campaign’ at the CMO Asia Social Media and Digital Marketing Awards 2017, while at the Asia Banking, Financial Services and Insurance Awards, Union Bank clinched two awards for its customer orientation and technology orientation. Union Bank gained significant recognition at the inaugural LankaPay Technnovation awards held in 2017 and collected four awards in recognition of its profound growth and performance in the technological innovation space within the banking industry. Union Bank’s Annual Report 2016 won the ‘Compliance Award for Excellence’ in the financial services sector at the grand finale of the 53rd Annual Report Awards conducted by the Institute of Chartered Accountants of Sri Lanka.

    Commenting on the performance of the Bank, Director/Chief Executive Officer of Union Bank Mr. Indrajit Wickramasinghe stated “the year 2017 ended a period of transformation and the implementation of a 3 year strategic plan that resulted insignificant enhancements to the business model resulting in transformational growth in the Bank’s performance during these 3 years. Our strategic aim is to be amongst the preferred Retail/SME and Transactional Banks by 2020 with greater focus on building relationships. Beginning 2018, we will achieve this by embarking on an enhanced growth trajectory in our preferred segments and strengthening our franchise value”

    Union Bank Biz Direct powers UA with cutting-edge Cash Management technology

    Union Bank Biz Direct powers UA with cutting-edge Cash Management technology

    CEO Union Bank, Indrajit Wickramasinghe presents a plaque to CEO Union Assurance Dirk Pereira. Also in the photograph (from L to R) are, Anura Hettikanda – Senior Manager Life Operations UA, Ruwan Rodrigo –Senior Manager Finance UA, Iroshi Tittagoda – GM Life Operations at UA, Sherine Cadre – GM Finance & Planning at UA, Hiranthi De Silva- VP Wholesale Banking at Union Bank, Asanga Tennakoon – AVP/Corporate Banking Team Head at UB, Pasindu Dharmasiri- Chief Manager/Head of Transaction Banking and Cash Management at UB and Manula Ekanayake – Manager Client integration & implementation at UB.

    Union Bank partnered Union Assurance PLC (UA) with the Bank’s revolutionary cash management solution Union Bank Biz Direct, enabling greater cash management efficiency for the leading insurer.

    Union Bank is the only local bank to offer a state of the art, end to end payments and cash management solution bundled with Host to Host (H2H) and multi factor authentication modes where clients enjoy the freedom to choose the authentication mode interoperability. Geared for comprehensive fraud prevention and security, Union Bank Biz Direct offers multi factor authentication with Hard/ Pin Pad and Soft /Mobile tokens along with One Time Password (OTP) log-in access. Additionally, SMS and E-mail confirmations are also offered as multiple form factors. The comprehensive claims settlement and cash management system effortlessly integrates with commonly applied ERP (Enterprise Resource Planning) systems while seamlessly integrating across multiple ERPs of a company, thus eliminating layers of complexity and adding a new dimension of convenience and efficiency to cash management functions.

    The customised solution, designed and delivered for Union Assurance PLC further offers comprehensive Payments Initiation through the H2H channel while facilitating Receivables, Collections and Reconciliation though MT940 (as per ISO standards) solution which is carefully aligned with the organisation’s current processes, practices and audit standards. Trilingual Corporate cheque counter foil for beneficiaries is another highlight of the system which will mark a milestone for UA and the insurance services industry of Sri Lanka.

    Commenting on the partnership the General Manager Finance and Planning of Union Assurance PLC, Sherin Cader said, “Running a business in today’s competitive market space can be quite complex. Business owners must juggle multiple operational demands and ensure products or services meet customers’ needs effectively and efficiently while staying atop the latest technological trends. With so much going on, it is beneficial to streamline some processes to free up time to focus on more value adding tasks. One such area which we at Union Assurance identified is the management of our claims payment process, thereby the cash out flows. This is why we believe that Union Bank’s Biz Direct solution will enable our company to avoid common inefficiencies and risks in the payment process as it is a customisable solution with the right combination of services that can lead to improved security and speed while at the same time increasing business efficiency by freeing up time and resources in-house.”

    Commenting on the partnership with UA, Union Bank’s Chief Manager/Head of Transaction Banking and Cash Management Pasindu Dharmasiri stated, “I’m pleased to announce the completion of the inaugural integration of UB Enterprise solution powered through Union Bank Biz Direct for UA, to enable faster, efficient and more precise payments and cash management processes for the company. As one of the trusted cash management partners of one of the leading insurers in the country, we believe that this partnership will afford UA many exclusive benefits by simplifying otherwise cumbersome processes such as Current account management, vendor payment management, cash collection and distribution of dividends. I’m also pleased to note that the experienced members of Union Bank Transaction Banking and Cash Management team has been successful in identifying specific business requirements and business dynamics of UA, thus putting together a customised cash management with right combination of functions that assures optimum results. As we look to roll out this superior technology to other corporates in the country, our capable team of cash management advisors with full understanding of the industries they work with; are well geared to act as financial resources that would enable growth and expansion of businesses, be it SMEs or large corporates.”

    Vice President Wholesale Banking of Union Bank, Hiranthi De Silva remarked “Cash management services are evolving rapidly with the aid of technology and many businesses aren’t still taking advantage of these facilities to ease their burdens of collecting, depositing and disbursing funds. Also, some businesses don’t monitor for cheque frauds or unauthorised transactions, which could be a costly oversight if an incident were to occur. Inefficiencies like these that cost businesses both time and money, could be completely avoided with an electronically managed process. Union Bank Biz Direct is one such groundbreaking cash management solution which would change the way businesses manage their cash flows by adding a layer of security while boosting efficiencies by a few notches. We are the only local private commercial bank to offer a comprehensive cash management solution under one product and Union Bank will continue to pioneer this domain by continuously enhancing our Biz Direct solution to meet the changing payment and cash management needs of corporates and SMEs of the country.”

    More information on Union Bank BizDirect could be obtained by calling the Bank via 011 2448 047, while existing business banking clients of the Bank could contact the relevant Relationship Manager to avail this facility.

     

    Union Bank and UA Project Team
    The project team from Union Assurance and Union Bank. Standing (from L to R) are; Chandima Sewvandi, Chamika Hiranthi, Anura Hettikanda, Ruwan Rodrigo, Dinesh Rajapakse and Ranil Silva – from the UA team along with Pasindu Dharmasiri, Manula Ekanayake, Kasun Rochana, Lakmal Mettananda, Tashya Labrooy and Ereka Dahanayake from the Union Bank team.

    Union Bank salutes its long-serving employees

    Union Bank salutes its long-serving employees

    Once again the long serving employees of Union Bank were honoured at the Bank’s annual dinner dance held recently at Waters Edge, where they were felicitated with an award of recognition and rewards. Rajan Shanmugeswaran of the Wellawatte Branch, Oshadi Gunasekara of Internal Audit, Nirosha Kanangara of the Process Control unit were the recipients of the awards this year. This initiative is a part of the Bank’s continued efforts to recognise and appreciate the commitment and dedication of its long serving staff.

    Commenting on the awards, Vice President Human Resources, Ravi Jayasekera said, “Embedded within the success of Union Bank are the tireless effortsand dedication of our staff who have remained an integral part of the Bank throughout its progress. We believe that loyal, long-serving employees are one of the biggest assets of the Bank. At a time when changing jobs frequently is becoming a trend, Union Bank is proud to be felicitating long serving employees every year”.

     

    Established in 1995 as the 8th indigenous Bank, today Union Bank is amongst the highest capitalized private commercial Banks in Sri Lanka, offering a full range of products and services to personal and commercial financial sectors. Supported by the strength of a global giant, Union Bank has etched for its self a solid foundation of financial stability backed with international know-how and best practices and is rapidly progressing as one of Sri Lanka’s fastest growing Financial institutions.

     

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