Business
Union Bank records strong revenue growth in FY2022 despite challenges
Union Bank continued to be resilient throughout 2022 leveraging on its strong capital position and remained agile, posting an increased overall income leading to an improved core-banking performance during the year. The Bank’s gross income for the year increased significantly by 73% to LKR 18,966 MN as a result of the Bank cautiously managing its businesses with a stringent risk and recovery framework, whilst selectively pursuing for new business opportunities.
Net Interest Income (NII) increased by 36.6% to LKR 5,814 MN as a result of improved yields from the repricing of the loan portfolio and treasury assets. Prudent management of interest expenses lead to an increase in the Net Interest Margin (NIM) by 116 bps. Net Fee and Commission Income increased by 32.8% to LKR 1,143 MN aided by increased activity from the trade business, remittances, credit, and debit cards. Other Operating Income also increased by 121% as a result of the foreign exchange income and gains.
As a result of the stresses stemming from the macroeconomic environment and further challenges to the settlement of loans due to continued pressures faced by impacted borrowers, compelled the Bank to prudently provide for increased impairments which impacted the Bank’s profitability. The impairment charge for the year was LKR 2,556 Mn, an increase of 174% compared to the corresponding period.
Despite prudent cost management initiatives, the Total Operating Expenses of the Bank increased to LKR 588 Mn, an increase of 16% over the corresponding period, impacted by the Rupee depreciation and the increase in utility tariffs.
Consequently, the results from operating activities were LKR 925 Mn and the Bank’s Profit Before all Taxes including its equity accounted share of subsidiaries for the year was LKR 788 Mn and the Bank’s Profit After Tax (PAT) was LKR 314 Mn for the year ended 31 December 2022.
The Total Assets of the Bank increased by 9.4% to LKR 129,483 Mn by 31 December 2022. With the contraction in private sector credit and lending opportunities, the Bank’s Loans and Advances at the end of the year was LKR 67,727 Mn. All business segments focused on expanding lending to existing customers and maintaining credit quality whilst pursuing selective lending opportunities during the year. The Bank secured a funding line from the Asian Development Bank (ADB) which aided further funding to SMEs to sustain and revive businesses. The Bank continued to support impacted customers with customised payment plans whilst extending the relief measures mandated by the Central Bank.
The Bank maintained a robust liquidity position both in LKR and FCY throughout the year. Customer deposits remained stable and increased by 11% to LKR 92,592 Mn aided by prudent deposit mobilization amidst rate revisions. The average CASA of the Bank remained healthy with a CASA ratio of 23% as of 31 December 2022. The Bank’s stage 3 loan ratio stood at 8.19%.
The Bank continued to maintain a robust capital adequacy position, well above the regulatory requirements and the Bank’s Total Capital Ratio was 18.26% as of 31 December 2022. During the year, the rating of the Bank was reaffirmed at BBB-(lka) with a Negative Rating Watch by Fitch due to the stresses in the operating environment.
The Union Bank Group, consisting of Union Bank of Colombo PLC, UB Finance Company Ltd., and National Asset Management Ltd., recorded a PBT amounting to LKR 991 Mn and a PAT of LKR 423 Mn for the year ended 31 December 2022. The Total Assets of the Group was LKR 136,679 Mn an increase of 10% with the Bank’s share amounting to over 95% noting that the group performance is propelled by the Bank.
The Bank acted with empathy in understanding the evolving needs of customers during a challenging year and remained committed to ensuring uninterrupted services with an enhanced focus on digital platforms. During the year, the Bank invested in several key digital transformation and IT infrastructure projects with a focus on improved security and reliability including the upgrade of the Data Centre and the ATM Switch. The Bank also connected to the LankaPay Online Payment Platform for IRD, Customs and Ports Authority payments and added Cargills FoodCity network of outlets for deposits and credit card payments through its Agent Banking service providing enhanced convenience to customers. The Bank also provided an enhanced range of services including onsite cheque printing through its cash management solution Union Bank BizDirect for ease of business operations of the SME and Corporate customers. During the year Union Bank continued to uphold its status in the LMD Most Valuable Brands in Sri Lanka and was also listed in the LMD Most Respected Entities.
Union Bank
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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