Union Bank records steady growth with favourable 1Q results

Union Bank ended the first three months of 2021 with a strong performance, reflecting a steady growth momentum and fueling favourable expectations.

Union Bank’s core banking performance was propelled by focused efforts on strategically significant product and service propositions. Despite challenges that continued to prevail during the review period, the Bank’s re-strategised product and service prioritisation and swift action to capitalise on the positive sentiments in the macro-economic dynamics since the roll-out of the vaccination campaign, paved the way for this growth in the first quarter of 2021.

Union Bank’s overall revenue for the quarter was Rs.1,521 mn and despite the tough operating environment the overall revenue grew by 1% over the comparative quarter.

The Bank’s Net Interest Income (NII) was Rs. 985 mn and declined marginally by 4% over the comparative period ended 31st March 2020, due to the lower AWPLR that prevailed during the review period in comparison to the previous year. Interest rate rebates and rate caps imposed on certain products under CBSL directives along with concessionary lending programmes which continued in support of Covid-19 affected customers further contributed to this decline. While the credit demand had not picked up at the expected pace despite conducive market interest rates and concessions granted to customers, an uptick in economic activity contributed to the overall credit growth. Effective portfolio management strategies contributed towards managing the NII amidst these challenges.

(Union Bank)