Business
Union Bank posts strong income growth in 1Q2023
The first quarter of 2023 witnessed continued positive sentiments in Sri Lanka’s economic activity with the IMF approved Extended Fund Facility (EFF). Significant exchange rate appreciation, moderating inflation, a notable drop in T-bills rates and selective easing of import restrictions resulted in the Banking sector to re-align its business focus.
At a time when the IMF reiterates the importance of stability of the banking system through robust capitalisation, Union Bank continues to remain resolute with a strong capital position well above the regulatory requirements.
During 1Q2023 Union Bank posted an increased total operating income of LKR, 2,064Mn an increase of 25% over the corresponding period ensuing in an improved core-banking performance as a result of the Bank cautiously managing its businesses whilst selectively pursuing new business opportunities.
The resultant increase in revenue was mainly derived from the increase in the Bank’s Net Interest Income (NII) by 49% to LKR 1,622Mn due to improved yields from the repricing of the loan portfolio and treasury assets. The Treasury prudently managed the Government Securities Portfolio whilst taking advantage of the inter-bank market opportunities. Timely repricing of the asset book along with prudent management of interest expenses lead to an increase in the Net Interest Margin (NIM) by 172bps. Net Fee and Commission Income also increased by 26% to LKR 321Mn as a result of the notable increases in the trade business supported by deposits related fees and credit card fees.
In comparison to the same period of the previous year where the Rupee depreciation resulted in notable exchange rate gains, the appreciation of the rupee during the quarter under review adversely impacted the Bank’s Other Operating Income to reduce by 97% to LKR 9.2Mn, resulting adversely towards the Bank’s profitability.
Continued challenges to recovery and collection activities compelled the Bank to prudently provide for increased impairments, which negatively impacted the Bank’s profitability. As a result, the impairment charge for the period was LKR 450Mn, an increase of 56% compared to the corresponding period.
Despite stringent cost management measures, the Total Operating Expenses of the Bank increased by 23% to LKR 1,213Mn over the corresponding period due to the significant increase in inflation. Consequently, the Results from Operating Activities were LKR 401Mn.
The Bank’s Profit Before all Taxes including its equity accounted share of subsidiaries was LKR 422Mn and the Bank’s Profit After Tax (PAT) was LKR 145Mn for the quarter ended 31st March 2023. In comparison to the first quarter of last year, the significant increase in corporate tax, VAT and Social Security Contribution Levey adversely impacted the current period’s bottom line.
The Total Assets of the Bank was LKR 118,800Mn by 31 March 2023. Due to the limited opportunities in the market and the revaluation of the foreign currency loans as a result of the LKR appreciation against USD, the Bank’s Loans and Advances contracted marginally to LKR 62, 978 Mn and the downward revaluation of the foreign currency deposits also resulted in the contraction of the Bank’s liability book. The Bank maintained a healthy liquidity position both in LKR and FCY during the quarter and the Bank’s deposits at the end of the quarter was LKR 90,250Mn supported by prudent deposit mobilisation measures and strategically managed margins. The CASA Ratio improved to 25.5%. The Bank’s Total Capital Ratio was well above the regulatory limits and stood at 18.55% as of 31 March 2023.
The Union Bank Group, consisting of Union Bank of Colombo PLC, UB Finance Company Ltd., and National Asset Management Ltd., recorded a PBT before all taxes amounting to LKR 496Mn and a PAT of LKR 174Mn for the quarter ended 31 March 2023. The Total Assets of the Group was LKR 125,803Mn and the Bank’s share amounted to over 94%.
During the period under review, Union Bank was recognised among the Top 100 public limited liability companies in Sri Lanka for transparency in corporate reporting by Transparency International Sri Lanka (TISL). The Bank was placed 14/100 for the year 2022 and was ranked fully transparent on Organisational Transparency and significantly transparent on Anti-corruption and Domestic Financial Reporting.
The Delegation of German Industry and Commerce in Sri Lanka (AHK Sri Lanka) proudly facilitated the first-ever Sri Lankan delegation’s participation at Drupa 2024, the world’s largest trade fair for the printing industry and technology. Held after an eight-year hiatus, Drupa 2024 was a landmark event, marking significant advancements and opportunities in the global printing industry.
AHK Sri Lanka played a pivotal role in organising and supporting the delegation, which comprised 17 members from the Sri Lanka Association for Printers (SLAP), representing eight companies from the commercial, newspaper, stationery printing, and packaging industries. This pioneering effort by AHK Sri Lanka not only showcased the diverse capabilities of Sri Lanka’s printing sector but also facilitated vital bilateral discussions with key stakeholders from the German printing industry.
Business
Unveiling Ayugiri: Browns Hotels & Resorts sets the stage for a new era in luxury Ayurveda Wellness
In a captivating reimagining of luxury wellness tourism, Browns Hotels & Resorts proudly unveiled the exquisite Ayugiri Ayurveda Wellness Resort Sigiriya. This momentous occasion, celebrated amidst a vibrant and serene grand opening on the 6th of June, heralds a new chapter in the Ayurveda wellness tourism landscape in Sri Lanka. Nestled amidst 54 acres of unspoiled natural splendour, Ayugiri features 22 exclusive suites and stands out as the only luxury Ayurveda wellness resort in the country offering plunge pools in every room, rendering it truly one-of-a-kind.
The grand opening of Ayugiri Ayurveda Wellness Resort was an enchanting event, where guests were captivated by the melodies of flutists and violinists resonating through Sigiriya’s lush landscapes. As traditional drummers and dancers infused the air with vibrant energy, Browns Hotels & Resorts’ CEO, Eksath Wijeratne, Kotaro Katsuki, Acting Ambassador for the Embassy of Japan and General Manager, Buwaneka Bandara, unveiled the resort’s new logo, marking a significant moment witnessed by distinguished guests from the French Embassy, Ayurveda and wellness enthusiasts along with officials from the Sigiriya area, LOLC Holdings and Browns Group.
“Our strategic expansion into wellness tourism with Ayugiri Ayurveda Wellness Resort Sigiriya symbolises a significant milestone for Browns Hotels & Resorts. Wellness tourism has consistently outperformed the overall tourism industry for over a decade, reflecting a growing global interest in travel that goes beyond leisure to offer rejuvenation and holistic well-being. By integrating the timeless wisdom of Ayurveda with modern luxury, we aim to set a new standard in luxury wellness tourism in Sri Lanka. Whether your goal is prevention, healing, or a deeper connection to inner harmony, Ayugiri offers a sanctuary for holistic well-being” stated Eksath Wijeratne.
Ayugiri encapsulates the essence of life, inspired by the lotus flower held by the graceful queens of the infamous Sigiriya frescoes. Just as the lotus emerges from the murky depths, untainted and serene,
Ayugiri invites guests on a journey of purity and rejuvenation, harmonised with a balance of mind, body and spirit, the essence of nature, echoes of culture and the wisdom of ancient Ayurvedic healing.
HNB General Insurance, one of Sri Lanka’s leading general insurance providers, has been honored as the Best General Bancassurance Provider in Sri Lanka 2024 by the prestigious Global Banking and Finance Review – UK.
The esteemed accolade underscores HNB General Insurance’s unwavering commitment to excellence and its outstanding performance in the field of bancassurance. Through dedication and hard work, the HNB General Insurance team has continuously endeavored to deliver innovative insurance solutions, cultivate strong relationships with banking partners, and provide unparalleled service to customers nationwide. This recognition is a testament to the team’s dedication and relentless pursuit of excellence in the bancassurance business.
“We are honored to receive this prestigious award, which reflects our team’s tireless efforts and dedication to delivering value-added insurance solutions and exceptional service through our bancassurance partnerships,” said Sithumina Jayasundara, CEO of HNB General Insurance. “This recognition reaffirms our position as a trusted insurance provider in Sri Lanka and motivates us to continue striving for excellence in serving our customers and communities.”
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