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The Invisible
The Invisible
Posts : 2652
Join date : 2016-11-28
Age : 41

UBC Union Bank of Colombo Empty UBC Union Bank of Colombo

on Tue Sep 03, 2019 12:09 pm
Message reputation : 100% (1 vote)
Union Bank in talks with investors for funding UB Finance



ECONOMYNEXT- Sri Lanka’s Union Bank of Colombo Plc, said that it is in talks with potential investors for ‘strategic options’ for its subsidiary UB Finance Company Limited (UBF).




“We wish to inform you that the bank has engaged itself in discussions with identified investor/s to explore strategic options for its subsidiary,” Union Bank said in a stock exchange filing.




However, Union Bank has yet to receive a definitive offer from potential investors, and would continue to explore other options for UBF.




“The board of directors of the bank has decided to explore other strategic options for UBF, including, but not limited to divestment, merger, restructuring, spin-out.”




Union Bank owns 73.31 percent of the finance firm’s shares.




For the March 2019 quarter, UBF’s net profits were 20 million rupees, down from 71.8 million rupees as higher bad loan provisioning from the IFRS 9 accounting standard ate into earnings, interim financial statements showed.




The firm’s total loans were 9.97 billion rupees in March, down from 10.01 billion rupees a year earlier, while non-performing loans had grown to 1.8 billion rupees from 1.4 billion rupees.


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Just over half of the firm’s loans are in vehicle leases and hire purchases, while a quarter are in asset-backed loans, and 17 percent are factoring and working capital lending.




UBF’s asset base was 11.1 billion rupees in March, down marginally from 11.2 billion rupees a year earlier.




The firm is running with capital below central bank regulations set to manage risks.




As at March 31, UBF’s core capital ratio was 4.09 percent, below the regulatory minimum of 6 percent, and total capital ratio was 6.03 percent, short of the required 10 percent, financial statements showed. (Colombo/Sep03/2019)
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