In the context of challenging market circumstances that have tested business resilience across all industries, Union Bank found a powerful first half of the year with an important development in key bank income, with resultants before all taxes of Rs. 849 million.
In the second quarter of 2019, the banking sector was facing unforeseen difficulties, which were driven by unfortunate events in April 2019 under challenging financial circumstances. The Union Bank has recorded good key banking development with net interest income (NII) up considerably by 20% YY, to report Rs. 2,131 million in spite of a highly demanding macro setting. The Bank’s net interest margin enhanced from 3.1% in the quarter to 3.4%.
Capital gain revenue for the period amounted to Rs 253 million, a remarkable increase in YoY. For this time, the revenues from unit assets were Rs.123 million, representing a decrease of 20% YO. This is caused by the decline in unit trust assets over the period.
The decrease in other working revenues was largely attributable to the decrease in foreign trade revenue which represented roughly 50% of revenues for the respective period of the previous year.
The main reason was that company businesses were substantially reduced because of the quarter’s macroeconomic difficulties. The Bank’s total operating revenue grew to Rs. 2899 million during the quarter under review and represented a 13% development in YoY.
The director of Union Bank Indrajit Wickramasinghe commented on the Bank’s first-half results during 2019: “In spite of the many macro-environment difficulties, we had a very favorable 2019 so far. The findings are impressive, show our resilience and support the corporate strategy. In the latter portion of 2019, in conjunction with the regeneration of the financial environment, we will continue to develop at this rate and look forward to a better core financial results. “The profit after tax (PAT) for that era was Rs.297 million and grew by 18 percent. The Bank’s PAT has been greatly impacted by the tax rate rise. In comparison with 59% in the comparative year, the effective tax rate (all taxes) has increased to 70% over the period.