Union Bank of Colombo PLC (UB) Group net profit of Rs. 31.8 million for the quarter ended March 31 2015

Union Bank of Colombo PLC (UB) Group posted a net profit of Rs. 31.8 million for the quarter ended March 31, 2015, up 71 percent over the corresponding period last year, due to healthy growth in its loans and advances and the improvement in interest margins, the interim results released to the Colombo Stock Exchange showed. The bank's share closed flat at Rs. 25.20 yesterday, and the bank is among the top five private licensed commercial banks in terms of market capitalization. The net interest income grew by 60 percent year-on-year (yoy) to Rs. 614.9 million due to 28 percent fall in interest expenses amid marginally up (2 percent) interest income of Rs. 1.14 billion. Sri Lanka's key interest rates have been falling since end December 2012, hence the cost of the deposits are getting re-priced at these low rates resulting in lower interest cost for the banks. Further, UB is at an edge over its peer competitors as it enjoys one of the lowest cost of funds due to massive equity injection received last year thus becoming the country's highest capitalized banks. In August 2014, Culture Financial Holdings Limited (CFHL), an affiliate of TPG, a USA-based leading private investment firm with over US $ 65 billion assets under management invested US $ 117 million (or Rs.15.44 billion) with 70 percent stake in UB. The interest margin of the Bank on a standalone basis edged up by 9 basis points to 4.29 percent during the 3-months.