Union Banks hits billion-rupee PBT in 2018

Taxes impact heavily on one of the fastest growing commercial banks


CEO/Director Indrajit Wickremasinghe at debut of Union Bank Credit Card.

Union Bank of Colombo PLC established in 1995 as the country’s eighth indigenous bank has described itself as "one of Sri Lanka’s fastest growing commercial banks" serving the retail, SME and corporate sectors it has said in its recently released annual report.

It now has a network of 67 branches and deposits of Rs. 79 billion, up 13% from a year earlier, and a loan book of Rs. 74 billion, up 4% from the previous year. The year under review had seen the bank achieve a benchmark of a billion rupee profit before deduction of all taxes in the third quarter and grew its PBT to Rs. 1,248 million, up 49% from the previous year, at the end of the financial year.

The global investment company, TPG, with an investment of USD 117 million in 2014 acquired a 70% interest in the bank through its affiliate Culture Financial Holdings Ltd., marking a milestone in the financial services industry in the country as one of the largest foreign direct investments to Sri Lanka.

TPG is a leading global private investment firm founded in 1992 with over USD 79 billion of assets under management and offices in important cities globally. It has been present in Asia since 1994.

Wickremasinghe said that the launch of credit cards was a significant milestone during the year.

Corporate banking had done well during the year despite external drawbacks and moderate private sector credit growth. Market limitations throughout the year adversely impacted SME sector while the bank’s positioning as a full service entity enabled steady growth in the retail business.

"The significant increase in taxes by 106% impacted the profit after tax which was Rs. 473 million, a growth of 3% year-on-year," Director/CEO Indrajit Wickremasinghe said.

Apart from Culture Financial Holdings (70%) and Vista Knowledge Pte. Ltd (5.93%), Associated Electrical Corporation (2.68%) and Mr. A.I. Lovell (2.23%), there are no other big shareholders although several local high net worth investors are in the Top Twenty list.

There are over 31,000 shareholders in the register with over 27,000 owning up to a thousand shares each.

The directors of Union Bank are: Messrs. G. Trehan, Michael. J. O’Hanlon, Sabry Ghouse, Atul Malik (chairman), Indrajit Wickremasinghe (CEO), Priyantha Fernando (deputy chairman), Ms. Dilshani Wijayawardena, Trevine Fernandopulle, Puneet Bhatia, Ms. Sow Lin Chiew and Ranvir Dewan.

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