Union Bank FY2023 performance steadfast

Union Bank recorded a steadfast performance during FY2023, with an improved core banking performance with an 18 percent increase in gross income. The gross income for the year stood at Rs.22,410 million.
The net interest income, which was the main contributor, increased by 8 percent to Rs.6,290 million, as a result of improved yields from loans and treasury assets. Driven by timely repricing of the asset book and prudent management of interest expenses, the net interest margin was 4.7. percent. The net fee and commission income increased by 5 percent to Rs.1,200 million as a result of increased trade activities, credit cards and bancassurance fees. 

The bank’s operating income before impairments was Rs.8,098 million, an increase of 4 percent.  The impairment charge for the period was Rs.1,643 million. Despite prudent cost management initiatives, the bank’s total operating expenses increased by 20 percent to Rs.5,120 million, as a result of significant increases in utility tariffs and general expenses impacted by inflation. 

The bank’s profit before tax (PBT), including its equity accounted share of subsidiaries, increased by a noteworthy 119 percent to Rs.780 million and the bank’s profit after tax (PAT) also increased by 21 percent to Rs.379 million, as at December 31, 2023.  

The total assets of the bank stood at Rs.139,087 million as of December 31, 2023, which was a growth of 7 percent over the previous year. The liquid asset ratio stood at 37.93 percent whilst, the liquidity coverage ratio for all currencies was 787.67 percent, well above the regulatory requirements. 
The bank’s loans and advances were Rs.62,208 million, whilst customer deposits were Rs.87,985 million. Supported by strong sourcing efforts across all business segments the bank’s CASA ratio was recorded at 27 percent. 

The bank’s stage three loans ratio was at 12.5 percent as some of the large collateralised exposures moved into stage three. The bank’s total capital ratio was 18.2 percent as of December 31, 2023. 
The Union Bank Group, consisting of UB Finance PLC and National Asset Management Ltd, recorded an improved overall performance with a 72 percent increase in PBT, amounting to Rs.901 million and an increase in PAT by 10 percent, amounting to Rs.464 million for the period up to December 31, 2023. The total assets of the group were Rs.147,332 million, with the bank’s share amounting to over 94 percent.