INTERIM FINANCIAL STATEMENTS For the Nine months ended … · Union Bank of Colombo PLC STATEMENT...

INTERIM FINANCIAL STATEMENTS

For the Nine months ended 30 September 2014

Union Bank of Colombo PLC

INCOME STATEMENTPeriod ended 30 September 2014

1,000

30.09.2014 30.09.2013 Change 30.09.2014 30.09.2013 Change 30.09.2014 30.09.2013 Change 30.09.2014 30.09.2013 Change

Rs.000 Rs.000 % Rs.000 Rs.000 % Rs.000 Rs.000 % Rs.000 Rs.000 %

Interest income 2,923,972 3,166,727 (8) 944,497 1,102,285 (14) 3,286,312 3,366,955 (2) 1,091,641 1,209,392 (10)

Less: Interest expenses 1,758,203 2,245,436 (22) 508,035 760,475 (33) 1,980,475 2,359,828 (16) 601,084 811,648 (26)

Net interest income 1,165,769 921,291 27 436,462 341,809 28 1,305,837 1,007,126 30 490,556 397,744 23

Fee and commission income 125,096 114,751 9 44,790 33,810 32 238,837 178,289 34 86,095 58,058 48

Less: Fee and commission expenses 32,505 26,770 21 10,428 9,238 13 50,884 31,575 61 18,212 12,191 49

Net fee and commission income 92,591 87,981 5 34,362 24,572 40 187,953 146,713 28 67,883 45,868 48

Net gain from trading 74,060 81,349 (9) 27,062 28,846 (6) 78,186 107,515 (27) 27,485 51,576 (47)

Other operating income (net) 226,689 319,905 (29) 75,575 72,320 5 380,313 306,329 24 102,934 67,740 52

Total operating income 1,559,109 1,410,525 11 573,461 467,548 23 1,952,290 1,567,684 25 688,858 562,928 22

Less: Impairment for Loans & Other losses

Individual Impairment 23,392 31,553 26 9,302 21,500 57 (25,245) 60,983 141 (4,963) 51,302 110

Collective Impairment 222,483 107,972 106 78,426 67,078 17 250,250 83,982 198 74,192 43,088 72

Write Off 32,494 - 4,441 - 54,158 4,468 1112 26,104 -

Net operating income 1,280,739 1,271,001 1 481,292 378,970 27 1,673,128 1,418,251 18 593,525 468,538 27

Less: Personnel Expenses 464,874 379,729 22 158,221 133,654 18 569,501 464,409 23 195,940 174,182 12

Depreciation & Amortization 193,110 121,305 59 76,359 43,589 75 221,720 146,693 51 86,112 53,250 62

Other expenses 527,339 418,784 26 185,767 131,757 41 636,825 522,156 22 221,261 176,641 25

Operating profit/(loss) before value added tax

(VAT) on Financial Services 95,417 351,184 (73) 60,945 69,969 (13) 245,083 284,993 (14) 90,213 64,465 40

Less: Value added tax (VAT) on financial services 31,689 70,770 (55) 13,831 18,654 (26) 50,789 71,382 (29) 15,352 18,654 (18)

Profit before tax 63,728 280,414 (77) 47,114 51,315 (8) 194,294 213,611 (9) 74,861 45,811 63

Less: Tax expenses 2,650 52,017 (95) 8,393 12,288 (32) 72,726 63,779 14 14,572 (1,219) (1295)

Crop Insurance Levy 73 1,639 (96) - 1,639 (100) 73 1,639 (96) - 1,639 (100)

Nation Building Tax 5,281 - 2,305 - 5,281 - 2,305 - Profit for the period 55,724 226,759 (75) 36,416 37,389 (3) 116,214 148,192 (22) 57,983 45,392 28

Profit Attributable to:

Owners of the parent 55,724 226,759 (75) 36,416 37,389 (3) 78,399 175,235 (55) 50,742 40,381 26

Non controlling interests - - - - 37,816 (27,044) (240) 7,241 543 123355,724 226,759 (75) 36,416 37,389 (3) 116,214 148,192 (22) 57,983 45,392 28

Earnings per share on profit 0.16 0.65 (76) 0.10 0.11 (3) 0.22 0.50 (56) 0.15 0.12 26

BANK GROUP

For the nine months ended For the quarter ended For the nine months ended For the quarter ended

1


STATEMENT OF COMPREHENSIVE INCOMEPeriod ended 30 September 2014

30.09.2014 30.09.2013 Change 30.09.2014 30.09.2013 Change 30.09.2014 30.09.2013 Change 30.09.2014 30.09.2013 Change

Rs.'000 Rs.'000 % Rs.'000 Rs.'000 % Rs.'000 Rs.'000 % Rs.'000 Rs.'000 %

Profit for the period 55,724 226,759 (75) 36,416 37,388 (3) 116,214 148,192 (22) 57,983 45,392 28

Other comprehensive income/(expenses)

Actuarial gains and losses on defined benefit plans - - - - 1,570 - 0 -

Gains and losses on re-measuring available-for-sale financial assets 406 2,170 (81) 1,542 99 1457 9,596 6,825 41 9,249 (3,441) (369)

Other comprehensive income for the period, net of taxes 406 2,170 (81) 1,542 99 1457 11,166 6,825 64 9,249 (3,441) (369)

Total comprehensive income for the period 56,130 228,928 (75) 37,958 37,487 1 127,380 155,017 (18) 67,232 41,951 60

Attributable to:

Owners of the parent 56,130 228,928 (75) 37,958 37,487 1 84,396 179,621 (53) 56,024 42,984 30

Non-controlling interest - - - - 42,984 (24,604) (275) 11,208 (1,033) (1185)

56,130 228,928 (75) 37,958 37,487 1 127,380 155,017 (18) 67,232 41,951 60

BANK GROUP

For the nine months ended For the quarter ended For the nine months ended For the quarter ended

2


STATEMENT OF FINANCIAL POSITIONAs at 30 September 2014

1,000

Not

e

30.09.2014 31.12.2013 Change 30.09.2014 31.12.2013 Change

Rs.'000 Rs.'000 % Rs.'000 Rs.'000 %

Assets

Cash and cash equivalents 14 13,393,670 3,043,408 340 13,883,380 3,183,541 336

Balances with Central Bank 1,156,009 1,117,871 3 1,156,009 1,117,871 3

Placements with Banks 86,467 314,545 (73) 1,938,088 1,809,800 7

Derivative financial instruments 18 429 1,458 (71) 429 1,458 (71)

Other financial assets held-for-trading 42,680 312,150 (86) 63,102 312,150 (80)

Loans and receivables to banks - - 15,512 15,020 3

Loans and receivables to other customers 20 24,058,542 23,461,925 3 26,881,360 25,365,783 6

Deep discounted bond 2,445,819 2,375,111 3 - -

Financial investments – Available-for-sale 21 3,397,979 1,736,728 96 3,619,599 1,829,826 98

Financial investments – Held-to-maturity 138,004 139,556 (1) 138,004 139,556 (1)

Investments in subsidiaries 22 892,364 892,364 0 - -

Property, plant and equipment 26 769,667 1,025,088 (25) 889,564 1,147,115 (22)

Investment in real estate - - 332,952 340,147 (2)

Goodwill and intangible assets 25 952,035 53,951 1665 1,293,192 407,576 217

Income tax recoverable 116,453 94,515 100 116,453 94,515 100

Deferred tax assets 27 - - 516,894 520,774 (1)

Other assets 28 526,033 442,293 19 634,724 539,623 18

Total assets 47,976,151 35,010,962 37 51,479,261 36,824,753 40

Liabilities

Due to banks 29 1,179,609 163,448 622 1,278,077 192,429 564

Derivative financial instruments 19 58 - 58 -

Due to other customers 30 28,556,958 28,469,137 0 30,918,853 29,589,425 4

Other borrowings 32 - - 630,768 668,154 (6)

Current tax liabilities - - 172,350 163,604 5

Deferred tax liabilities 21,144 23,964 (12) 21,698 24,518 (12)

Other liabilities 33 1,457,524 897,127 62 1,898,715 992,903 91

Total liabilities 31,215,292 29,553,677 6 34,920,519 31,631,034 10

Equity

Stated capital/Assigned capital 16,334,782 4,979,791 228 16,334,782 4,979,791 228

Warrant Issued 65,484 - 65,484 -

Statutory reserve fund 61,714 58,928 5 70,656 63,272 12

Retained earnings 147,108 203,208 (28) (396,226) (351,933) 13

Investment fund reserve 149,723 213,717 (30) 158,204 214,889 (26)

Available-for-sale-reserve 2,048 1,642 25 19,133 14,174 35

Total shareholders’ equity 16,760,859 5,457,285 207 16,252,032 4,920,193 230

Non-controlling interests - - 306,710 273,526

Total equity 16,760,859 5,457,285 207 16,558,742 5,193,719 219

Total equity and liabilities 47,976,151 35,010,962 37 51,479,261 36,824,753 40

Contingent liabilities and commitments 28,480,341 20,811,865 37 28,480,341 20,811,865 37

Net Asset Value per Ordinary Share 15.36 15.63 (2) 14.89 14.09 6

(0) (0) (0) (0)

Memorandum Information

Number of Employees 745 691

Number of Branches 61 51

BANK GROUP

3


STATEMENT OF CHANGES IN EQUITYPeriod ended 30 September 2014

1,000

BANK

Ordinary Voting

Shares

Warrant

Issued Reserve Fund Investment Fund

Retained

Earnings

Available-For-Sale

Reserve Total

Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000

Balance as at 1 January 2013 (Restated) 4,979,791 - 53,299 146,322 286,452 (1,451) 5,464,414

Net Profit for the period - - - - 226,759 - 226,759

Transfers during the period - - 11,338 62,292 (73,630) - -

Dividend Paid - - - - (122,238) - (122,238)

Other Comprehensive Income - - - - - 2,170 2,170

Balance as at 30 September 2013 4,979,791 - 64,637 208,615 317,343 719 5,571,104

Balance as at 1 January 2014 4,979,791 - 58,928 213,717 203,208 1,642 5,457,285

Issue of share capital 11,354,991 - - - - - 11,354,991

Issue of warrants - 65,484 - - - - 65,484

Direct cost on share issue - - - - (85,719) - (85,719)

Net Profit for the period - - - - 55,724 - 55,724

Transfers during the period - - 2,786 (63,994) 61,208 - 0

Dividend Paid - - - - (87,313) - (87,313)

Other Comprehensive Income - - - - - 406 406

Balance as at 30 September 2014 16,334,782 65,484 61,714 149,723 147,108 2,048 16,760,859

GROUP

Ordinary Voting

Shares

Warrant

Issued Reserve Fund Investment Fund

Retained

Earnings

Available-For-Sale

Reserve Total

Non-Controlling

Interest Total Equity

Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000Rs.'000 Rs.'000

Balance as at 1 January 2013 (Restated) 4,979,791 - 53,299 147,494 (255,131) 10,601 4,936,053 274,257 5,210,310

Net Profit for the year - - - - 175,235 - 175,235 (27,044) 148,192

Loss of control - - - - (5,512) - (5,512) (5,093) (10,605)

Transfers during the year - - 11,338 62,292 (73,630) - - - -

Dividend Paid - - - (122,238) - (122,238) 8,917 (113,321)

Other Comprehensive Income - - - - 4,385 4,385 2,440 6,825

Balance as at 30 September 2013 4,979,791 - 64,637 209,787 (281,275) 14,986 4,987,926 253,477 5,241,402

Balance as at 1 January 2014 4,979,791 - 63,272 214,889 (351,933) 14,174 4,920,193 273,526 5,193,719

Issue of share capital 11,354,991 - - - - - 11,354,991 - 11,354,991

Issue of warrants - 65,484 - - - - 65,484 - 65,484

Direct cost on share issue - - - - (85,719) - (85,719) - (85,719)

Net Profit for the period - - - - 78,399 - 78,399 37,816 116,214

Transfers during the period - - 7,384 (56,685) 49,301 - - - -

Dividend Paid - - - - (87,313) - (87,313) (9,800) (97,113)

Other Comprehensive Income - - - - 1,039 4,959 5,998 5,168 11,166

Balance as at 30 September 2014 16,334,782 65,484 70,656 158,204 (396,226) 19,133 16,252,033 306,710 16,558,742

Certain amounts shown here do not correspondent to the Quarter 3, Financial Statements - 2013 and reflect adjustments made in accordance with the amended LKAS 19 (Employee Benefits)

4


STATEMENT OF CASH FLOWSPeriod ended 30 September 2014

2014 2013 2014 2013

Rs.'000 Rs.'000 Rs.'000 Rs.'000

Cash Flow from Operating Activities

Interest Received 3,035,439 2,966,671 3,100,613 3,166,899

Fees and Commission Receipts 92,591 87,981 187,953 146,713

Interest Paid (2,037,771) (2,059,343) (2,401,450) (2,173,735)

Receipts from Other Operating Activities 274,847 288,752 441,783 401,739

Payments on Other Operating Activities (1,048,521) (1,000,782) (1,302,260) (1,199,355)

Operating Profit before changes in Operating Assets

& Liabilities 316,585 283,279 26,639 342,260

(Increase)/Decrease in Operating Assets:

Balance with Central Bank of Sri Lanka (38,138) 487,247 (38,138) 487,247

Funds Advanced to Customers (1,027,000) (2,928,239) (1,650,044) (3,433,427)

Others (82,712) (91,935) (94,073) (91,979)

(1,147,850) (2,532,928) (1,782,255) (3,038,159)

Increase /(Decrease) in Operating Liabilities:

Due to Other customers 369,125 4,046,223 1,752,139 4,677,693

Other Liabilities (88,119) 137,399 198,769 216,191

281,005 4,183,622 1,950,908 4,893,884

Net Cash used in Operating Activities before Income Tax (550,259) 1,933,973 195,293 2,197,985

Retiring Gratuity paid (4,916) (1,561) (5,185) (13,761)

Income Tax (Paid) / Refunds (24,182) (96,870) (23,362) (95,887)

Net Cash used in Operating Activities (579,357) 1,835,543 166,746 2,088,337

Cash Flow from/(used in) Investing Activities

Dividends Received 11,146 12,501 1,961 2,772

Net investment in Other Financial Assets held-for-trading 286,636 (740,818) 270,176 (738,828)

Net increase in investment in Financial Assets held-to-maturity (71) (62,482) (71) (62,482)

Net increase in investment in Financial Assets available-for-sale (1,660,439) (606,250) (1,778,302) (606,485)

Net investment in Real Estates - - 7,195 13,020

Purchase of Property & Equipment (186,963) (461,042) (212,306) (508,274)

Purchase of Intangible Assets (12,528) (17,945) (14,413) (2,572)

Net Cash from/(used in) Investing Activities (1,562,218) (1,755,983) (1,725,759) (1,882,797)

Cash Flow from/(used in) Financing Activities

Proceeds from shares issued 11,269,272 - 11,269,272 -

Proceeds from warrants issued 65,484 - 65,484 -

Increase/Decrease in Borrowings 978,288 (277,706) 966,752 (251,997)

Dividend Paid (87,313) (122,238) (97,113) (131,154)

Net Cash from/(used in) Financing Activities 12,225,732 (399,943) 12,204,395 (383,151)

Net Increase/(Decrease) in Cash and Cash Equivalents 10,084,157 (320,384) 10,645,382 (177,611)

Cash and Cash Equivalents at Beginning of the year 3,308,143 2,934,848 3,419,295 2,965,215

Cash and Cash Equivalents at end of the year 13,392,300 2,614,464 14,064,677 2,787,604

Reconciliation of Cash and Cash Equivalents

Cash & Cash Equivalents 13,390,050 2,422,308 13,881,313 2,419,279

Placements with Banks 86,467 192,156 340,200 368,325

Due to Banks (84,218) - (156,836) -

13,392,300 2,614,464 14,064,677 2,787,604

BANK GROUP

5


NOTES TO THE FINANCIAL STATEMENTSAs at 30 September 2014

1 LOANS AND RECEIVABLES TO OTHER CUSTOMERS

30.09.2014 31.12.2013 30.09.2014 31.12.2013

Rs.'000 Rs.'000 Rs.'000 Rs.'000

Gross loans and receivables (Note 1.1) 24,689,820 23,994,426 28,322,886 27,076,184

(Less): Individual impairment charges (Note 1.2) (175,622) (165,628) (657,918) (1,043,342)

Collective impairment charges (Note 1.2) (455,656) (366,872) (783,609) (667,058)

Net loans and receivables 24,058,542 23,461,925 26,881,360 25,365,783

1.1 Loans and Receivables to other customers - by product

Overdrafts 6,923,640 6,642,056 6,923,640 6,642,056

Trade finance 5,155,530 4,613,724 5,155,530 4,613,724

Pawning 1,893,518 2,665,854 1,903,563 2,666,417

Staff loans 263,997 233,412 267,028 233,569

Term loans 8,985,688 8,313,025 10,248,206 9,545,786

Lease and Hire-purchase 1,007,964 1,157,998 2,464,267 2,162,833

Factoring 459,484 368,356 931,615 689,298

Investments in Debentures - - 18,078 18,000

Others - - 410,960 504,501

Gross Loans and Receivables 24,689,820 23,994,426 28,322,886 27,076,184

1.2 Movements in Individual and Collective Impairment Charges during the Period

Individual impairment charges

Opening balance 165,628 330,457 1,043,342 330,457

Charge/(Write back) to income statement 23,392 33,558 (25,245) 20,647

Net write-off during the year (13,399) (198,387) (360,179) (198,387)

Other movements - - - 890,624

Closing balance 175,622 165,628 657,918 1,043,342

Collective impairment charges

Opening balance 366,872 87,656 667,058 699,813

Charge/(Write back) to income statement 222,483 293,362 250,250 269,795

Net write-off during the year (133,699) (14,146) (133,699) (14,146)

Other movements - - - (288,403)

Closing balance 455,656 366,872 783,609 667,058

Total Impairment 631,278 532,500 1,441,527 1,710,401

2 LOANS AND RECEIVABLES TO BANKS

Investments in Debentures - - 15,512 15,020

- - 15,512 15,020

Bank Group

6


NOTES TO THE FINANCIAL STATEMENTSAs at 30 September 2014

30.09.2014 31.12.2013 30.09.2014 31.12.2013

Rs.'000 Rs.'000 Rs.'000 Rs.'000

3 DUE TO OTHER CUSTOMERS

Deposits Liability (Note 3.1) 27,858,007 28,339,687 30,283,369 29,462,271

Repurchased agreements 698,951 129,450 635,484 127,154

28,556,958 28,469,137 30,918,853 29,589,425

3.1 Deposits Liability

Demand deposits (Current accounts) 1,996,877 1,943,945 1,991,617 1,922,901

Savings deposits 4,167,523 3,493,917 4,171,071 3,492,166

Fixed deposits 18,755,288 19,570,531 21,182,362 20,715,909

Other deposits - CDs 2,938,319 3,331,295 2,938,319 3,331,295

27,858,007 28,339,687 30,283,369 29,462,271

Bank Group

7


EXPLANATORY NOTESPeriod ended 30 September 2014

1 The figures are provisional, unless otherwise stated as audited.

2

3

4

5

6

7

8

9 Information on Ordinary Shares

Market Value 30.09.2014 30.09.2013

Rs. Rs.

Market value 23.05 15.65

Highest price for the quarter 24.00 18.70

Lowest price for the quarter 19.00 15.20

No material events have been taken place subsequent to the reporting period that require disclosures or/ and adjustment in the Financial Statements except stated above.

Interim financial statements are presented in accordance with LKAS 34 - Interim Financial Reporting applicable after 01 January 2012 and there are no changes to the accounting

policies and methods of computation as against those disclosed in the Annual Report for the year ended 31 December 2013.

The Group financial statements comprise of the consolidated financial statements of the Bank and its subsidiaries National Asset Management Limited, UB Finance Company Limited

and the Special Purpose Entity, Serandib Capital (Private) Limited.

The final dividend of Rs.0.25 per share (in the form of cash) for the ordinary shares of the Bank for the year ended 31 December 2013 was paid on 4 April 2014.

Mr. Anil Amarasuriya – Director/CEO of the Bank announced the retirement with effect from 15th

November 2014

Mr. Indrajit Wikramasinghe is appointed as CEO – Designate with effect from 15th

October 2014. Mr. Wickramasinghe will take over as CEO from 15th

November 2014.

On 29th

of September 2014 Culture Financial Holdings Ltd. (CFHL) acquired 742,156,249 ordinary shares in the Bank representing 68% of the voting rights of the Bank. CFHL has

invested Rs.11,420,474,984/70 enabling the Bank to issue 742,156,249 ordinary shares by way of a private placement and 218,281,250 warrants to be exercised within a period of 6

years.

Board reconstituted subsequent to the acquisition and as at today the Board of Directors of the Bank are as follows;

1. Mr. Alexis Indrajit Lovell – Chairman

2. Mr. Bodahandi Asoka Keerthi De Silva – Deputy Chairman

3. Mr. Anil Suneetha Amarasuriya

4. Mr. Kin Leong Chong

5. Ms. Sow Lin Chiew (Alternate Director to Mr. Kin Leong Chong)

6. Mr. Priyantha Damian Joseph Fernando

7. Mr. Mohamed Hisham Sabry Ghouse

8. Mr. Hussain Imtiaz Muhseen

9. Mr. Ranvir Dewan

10. Mr. Gaurav Trehan

11. Dr. P. Jayendra Nayak

12. Mr. Puneet Bhatia

13. Mr. Michael J O'Hanlon

8


NOTES TO THE FINANCIAL STATEMENTS 1000

Period ended 30 September 2014

1,000

SEGMENTAL ANALYSIS - GROUP

1,000

2014 2013 2014 2013 2014 2013 2014 2013 2014 2013

Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000

Interest Income 687,666 1,017,115 612,094 402,057 1,640,230 1,679,241 346,322 268,542 3,286,312 3,366,955

Inter-Segment Interest Income (319,888) (309,124) (124,031) (223,014) 443,919 532,138 - 0 - -

Total Interest Income 367,778 707,991 488,063 179,043 2,084,149 2,211,379 346,322 268,542 3,286,312 3,366,955

Less: Interest Expense 260,571 339,895 109,282 152,489 1,421,048 1,734,051 189,574 133,393 1,980,475 2,359,828

Net Interest Income 107,207 368,095 378,781 26,555 663,100 477,328 156,749 135,149 1,305,837 1,007,126

Other Income 71,956 59,435 149,793 296,170 171,591 144,367 303,997 92,160 697,337 592,132

Total Net Income 179,162 427,531 528,574 322,724 834,691 621,694 460,746 227,309 2,003,174 1,599,259

Less: Other Expenses 28,567 31,439 5,401 15,205 710,453 514,274 242,723 217,501 987,145 778,419

Unallocated other expenses - - - - - - - - 770,946 535,848

Segmental Results 150,595 396,092 523,173 307,519 124,238 107,420 218,023 9,808 245,083 284,992

Less: VAT on Financial Services 50,789 71,382

Less: Taxation 72,726 63,779

Less: Crop Insurance Levy 73 1,639

Less: NBT 5,281 -

Profit after Taxation 116,214 148,192

Other Information

Segment Assets 7,454,030 9,653,059 15,924,425 4,049,262 19,102,728 16,600,936 6,220,329 4,671,619 48,701,512 34,974,876

Unallocated 2,777,749 1,849,877

Consolidated Total Assets 51,479,261 36,824,753

Segment Liabilities 3,325,087 5,462,281 477,059 127,379 26,536,346 23,552,757 4,010,647 2,232,495 34,349,138 31,374,912

Unallocated 571,381 256,122

Consolidated Total Liabilities 34,920,519 31,631,034

Cash flow from operating activities 34,892 449,835 31,057 155,790 83,224 742,671 17,572 740,041 166,746 2,088,337

Cash flow from investing activities (361,118) (585,853) (321,432) (202,897) (861,343) (967,234) (181,866) (126,813) (1,725,759) (1,882,797)

Cash flow from financing activities 181,973 (133,434) 11,496,731 (46,212) 434,045 (220,297) 91,645 16,792 12,204,395 (383,151)

TotalCorporate Treasury SME Other Group Companies

-9-


INFORMATION ON ORDINARY VOTING SHARES OF THE BANKAs at 30 September 2014

TOP 20 SHAREHOLDERS

Name of Shareholder No. of shares % holding

As at 30.09.2014

1 Culture Financial Holdings Ltd. 742,156,249 68.0%

2 Vista Knowledge (Pte) Ltd. 64,677,973 5.9%

3 Associated Electrical Corporation Ltd. 27,701,489 2.5%

4 Select Gain Ltd. 23,369,409 2.1%

5 Mr. Alexis Indrajit Lovell 22,743,780 2.1%

6 Sampath Bank PLC/ Dr. T. Senthilverl 21,493,916 2.0%

7 Mr. C.P.A Wijeyesekera 18,508,468 1.7%

8 EXSAB International Holding Co. for

Trading Development 15,000,000 1.4%

9 Mr. D.A.J Warunakulasuriya 14,842,730 1.4%

10 Rosewood (Pvt) Ltd. 9,493,698 0.9%

11 Mr. S.P.Khattar 9,337,124 0.9%

12 Ashyaki Holdings (Pvt) Ltd. 7,792,506 0.7%

13 Mr. I.S.Ong 7,550,000 0.7%

14 Commercial Agencies (Ceylon) Ltd. 4,320,888 0.4%

15 Ajita de Zoysa & Company Ltd. 4,320,887 0.4%

16 Seylan Bank PLC/ Mr. Malik Devapriya

Samarawickrama4,000,000 0.4%

17 Mr. M. D. Samarawickrama 3,660,582 0.3%

18 Standard Chartered Bank Singapore S/A HL

Bank Singapore Branch3,316,500 0.3%

19 Seylan Bank PLC/ Arc Capital (Pvt) Ltd. 3,310,051 0.3%

20 Seylan Bank PLC/ Thirugnanasambandar

Senthilverl2,775,000 0.3%

1,010,371,250 92.6%

Other shareholders 81,034,999 7.4%

Total 1,091,406,249 100.0%

As at 30 September 2014

Number of shares in public holding 237,888,427

Percentage of public holding 21.80%

DIRECTORS' INDIVIDUAL HOLDING IN SHARES

No. of shares held

As at 30.09.2014

Mr. Alexis Indrajit Lovell 22,743,780

Mr. Bodahandi Asoka Keerthi de Silva 8,900

Mr. Anil Suneetha Amarasuriya 63,552

Mr. Kin Leong Chong None

Mr. Priyantha Damian Joseph Fernando None

Mr. Hussain Imtiaz Muhseen None

Mr. Mohamed Hisham Sabry Ghouse None

Ms. Sow Lin Chiew (Alternate Director to Mr. Kin Leong Chong) None

Mr. Ranvir Dewan None

Mr. Gaurav Trehan None

Director's Name

10


NOTES TO THE FINANCIAL STATEMENTSPeriod ended 30 September 2014

MEASUREMENT OF FINANCIAL INSTRUMENTS

1,000

a. Bank - 2014

HFT HTM L & R AFS Others Total

Rs.000 Rs.000 Rs.000 Rs.000 Rs.000 Rs.000

ASSETS

Cash and cash equivalents 1,434,890 - 11,958,781 - - 13,393,670

Balances with Central Bank - - 1,156,009 - - 1,156,009

Placements with Banks - - 86,467 - - 86,467

Derivative Financial Instruments 429 - - - - 429

Other financial assets held-for-trading 42,680 - - - - 42,680

Loans and receivables to other customers - - 24,058,542 - - 24,058,542

Deep Discounted Bond - - 2,445,819 - - 2,445,819

Financial investments – Available-for-sale - - - 3,397,979 - 3,397,979

Financial investments – Held-to-maturity - 138,004 - - - 138,004

Total financial assets 1,477,999 138,004 39,705,617 3,397,979 - 44,719,599

HFT Amortised cost Others Total

LIABILITIES Rs.000 Rs.000 Rs.000 Rs.000

Due to banks - 1,179,609 - 1,179,609

Derivative financial instruments 58 - - 58

Due to other customers - 28,556,958 - 28,556,958

Total financial liabilities 58 29,736,567 - 29,736,624

b. Bank - 2013


Rs.000 Rs.000 Rs.000 Rs.000 Rs.000 Rs.000

ASSETS

Cash and cash equivalents 677,056 - 2,366,352 - - 3,043,408


Placements with Banks - - 314,545 - - 314,545

Derivative Financial Instruments 1,458 - - - - 1,458



Deep Discounted Bond - - 2,375,111 - - 2,375,111



Total financial assets 990,664 139,556 29,635,803 1,736,728 - 32,502,751



Due to banks - 163,448 - 163,448


Total financial liabilities - 28,632,586 - 28,632,586

11


NOTES TO THE FINANCIAL STATEMENTSPeriod ended 30 September 2014

MEASUREMENT OF FINANCIAL INSTRUMENTS

1,000

a. Group - 2014


Rs.000 Rs.000 Rs.000 Rs.000 Rs.000 Rs.000

ASSETS

Cash and cash equivalents 1,434,890 - 12,448,490 - - 13,883,380


Placements with Banks - - 1,938,088 - - 1,938,088

Derivative Financial Instruments 429 - - - - 429


Loans and receivables to banks - - 15,512 - - 15,512




Total financial assets 1,498,421 138,004 42,439,458 3,619,599 - 47,695,483



Due to banks - 1,278,077 - 1,278,077

Derivative financial instruments 58 - - 58


Other Borrowings - 630,768 - 630,768

Total financial liabilities 58 32,827,699 - 32,827,757

b. Group - 2013


Rs.000 Rs.000 Rs.000 Rs.000 Rs.000 Rs.000

ASSETS

Cash and cash equivalents 677,056 - 2,506,484 - - 3,183,541


Placements with Banks - - 1,809,800 - - 1,809,800

Derivative Financial Instruments 1,458 - - - - 1,458


Loans and receivables to banks - - 15,020 - - 15,020




Total financial assets 990,664 139,556 30,814,958 1,829,826 - 33,775,004



Due to banks - 192,429 - 192,429


Other Borrowings - 668,154 - 668,154

Total financial liabilities - 30,450,008 - 30,450,008

12


SELECTED PERFORMANCE INDICATORS

30-Sep-1431-Dec-13

(Audited)

Regulatory Capital Adequacy

Core Capital (Tier 1 Capital), Rs. ‘000 16,788,806 5,111,078

Total Capital Base, Rs. ‘000 15,264,381 4,820,464

Core Capital Adequacy Ratio, as % of Risk Weighted Assets

(Minimum Requirement, 5%) 54.24% 17.91%

Total Capital Adequacy Ratio, as % of Risk Weighted Assets

(Minimum Requirement, 10%) 53.24% 16.89%

Assets Quality (Quality of Loan Portfolio)

Gross Non-Performing Advances Ratio, % (net of interest in

suspense) 11.57% 8.24%

Net-Non Performing Advances,% (net of interest in suspense

and provision) 10.65% 7.80%

Profitability

Interest Margin, % 4.33% 3.51%

Return on Assets (before tax), % 0.24% 0.32%

Return on Equity, % 1.36% 2.07%

Regulatory Liquidity

Statutory Liquid Assets, Rs. ‘000

Domestic Banking Unit 7,145,673 6,282,885

Off-Shore Banking Unit 349,068 276,197

Statutory Liquid Assets Ratio, % (Minimum Requirement, 20%)

Domestic Banking Unit 23.67% 22.01%

Foreign Currency Banking Unit 21.31% 23.09%

CERTIFICATION:

Signed Signed

Kusal Perera

AVP Finance

Signed Signed

Anil Amarasuriya Alexis Indrajit Lovell

Chief Executive Officer Chairman

Date: 14.11.2014

(b) the information contained in these statements have been extracted from the unaudited financial

statements of the Bank and the Group unless indicated as audited

Malinda Samaratunga

Chief Financial Officer

As at 30 September 2014

Item

Bank

We, the undersigned, being the Chairman, Chief Executive officer, Chief Financial Officer and AVP

Finance of Union Bank of Colombo PLC certify jointly that:

(a) the above statements have been prepared in compliance with the format and definitions prescribed by

the Central Bank of Sri Lanka

13

Union Bank of Colombo PLC Media Release

Union Bank group reports 28% increase in profit after tax for Q3/2014 and gears

up for next phase of growth.

Colombo Sri Lanka, 8 November 2014,

Union Bank’s recent investment agreement with TPG the US based global private investment

firm has placed the Bank amongst the top 5 commercial Banks in Sri Lanka in market

capitalization. The investment comprises a combination of primary equity, secondary shares

and warrants, and upon exercise of the warrants, could be up to approximately $117Mn.

Backed by a solid financial standing, global expertise and best practices, Union Bank is poised

for the next phase of growth with a wider focus on retail, SME and corporate banking sectors.

Highlighting its performance for 3Q, 2014, the Union Bank Group reported a profit after

tax(PAT) of Rs.57.9Mn for the quarter ending 30th September 2014, an increase of 28% in

comparison to the same quarter in 2013. During the same period, the Bank reported a profit

after tax of Rs.36.4Mn compared to Rs.37.4Mn in the corresponding period of 2013. At the end

of the nine months, the group profit after tax stood at Rs 116.2Mn and the Bank at Rs. 55.7Mn

respectively. The Bank’s subsidiaries, UB Finance and National Asset Management have

recorded 68Mn and 30Mn PAT respectively, contributing positively towards the Group

profitability.

Net Interest income of the Bank, for the period of nine months highlighted strong performance

of 27% growth (Rs.1, 165.8Mn) in comparison to the corresponding period of last year and is

attributed to the effective liability management initiatives. The group highlighted a 30% growth

amounting to Rs.1, 305.8Mn for the same period.

Growth in the Advances of the Bank remained at 2.5% during the first nine months resultant

from the slow private sector credit growth. Bank’s Advances at the end of the quarter stood at

Rs.24, 058.5Mn and the group at Rs.26, 881.4Mn which is a 6% growth due to strong growth in UB

Finance Loans book.

Deposits of the Bank remained consistent at 0.3% over the nine months period. Total deposits

of the Bank stood at Rs..28,557Mn and the group at Rs.30,918mn, a 4% growth as a result of

higher growth rate contributed by UB Finance.

Derived from the capital infusion from the TPG investment which took place at the end of the

quarter, total Assets of the Bank highlighted a 37% growth during the nine months amounting

to Rs.47, 976 Mn. Total Assets of the Group stood at to Rs.51, 479 Mn highlighting a 40%

growth amounting to an incremental Rs.14,655 Mn.

Despite the Rs.100mn one off share disposal gain reported in 2013, the total Operating Income

of the Bank reported a 11% increase amounting to to Rs.1,559 Mn. This is a Rs.148mn increase

in comparison to the previous period. If the one off capital gain is excluded, the impact on the

current year would be an approximate increase of 18%. There were no one off significant

transactions reported during the first nine months of 2014. Group total operating income

increased by 25% to Rs.1,952 Mn which is a Rs.384Mn increase compared to the previous

period.

The strong operating income growth of the Bank has supported to reduce the impact of the

impairment charges during the nine months period. Pawning constituted 72% of the

impairment charge. The Bank’s exposure to pawning portfolio is currently at 7.67%. The

quarter highlighted a 17% reduction in the impairment charge in comparison to the previous

quarter of 2014. Group total impairment charge for the nine month period states Rs 129 Mn

increase in comparison to the corresponding period of 2013.

During the period under review expenses of the bank increased by 28% to Rs.1, 186Mn and the

Group to Rs.1, 428Mn. This is derived as a result of the continued investments made on

strategic Initiatives of the bank such as Branch Network expansion which grew YOY by 36% and

the implementation of a new core banking system.

Union Bank of Colombo PLC Media Release

Mr. Anil Amarasuriya, Director/CEO reviewing the bank’s performance stated that “Union Bank

is geared to face the challenges of tomorrow and move to the next phase of growth. Now

repositioned with a sound financial standing and regulatory capital adequacy requirements

comfortably met beyond 2015, Union Bank’s focus in 2014 has been to consolidate on its

operation efficiencies. This resulted the Bank making significant investments in expansion and

technology supporting to and gear up to fulfil the aspirations of the next growth phase”.

With the announcement of Mr. Anil Amarasuriya’s impending retirement at the end of his

contract, the Board of Directors welcomed on board Mr. Indrajit Wickramasinghe who joined

on 15th October 2014 as CEO designate. As the transition to the new owners unfolds, the Bank

also announced the appointment of five new directors representing TPG to the Board.

Union Bank is one of Sri Lanka’s leading Bank’s supported by the strength of TPG, the US based global

private investment firm with US$66 billion in capital under management and an extensive global

network with significant presence in Asia and Europe. TPG’s recent investment in Union Bank marked a

milestone in the financial services industry as one the largest foreign direct investments to Sri Lanka. The

investment comprises a combination of primary equity, secondary shares and warrants, and upon

exercise of the warrants, could be up to approximately $117Mn. With a solid foundation etched with

financial stability and international know-how, Union Bank is amongst the top 5 commercial Banks in

market capitalization in Sri Lanka, offering a full range of products and services to personal and

commercial financial sectors.

INTERIM FINANCIAL STATEMENTS For the Nine months ended … · Union Bank of Colombo PLC STATEMENT...

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