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Investor Presentation 1Q 2018

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“Our Vision is to be the innovator of Banking Solutions to the wider Corporate, SME and Retail Segments and to be their Bank of choice, through professional and empowered people”.

Vision

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Mission

To our customers we provide the means of economic upliftment through customized banking and financial services.

To our shareholders we provide a return on their investment above industry norm.

To our staff we are a learning and innovative organization providing opportunities for faster career progression within a pleasant work environment.

We adhere to the practice of good Corporate Governance in the eyes of the regulatory authorities.

We are conscious of the need to be a responsible corporate citizen for the betterment of our society.

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Key Company Milestones

1995-2010 2011-2013 2014-2016 2017 onwards

Established as the 8th Indigenous Commercial Bank

First bank to launch Internet Banking

Restructuring of the Bank through a Sampath Bank led consortium

Landmark investment from Middle East - Royal Family of Saudi Arabia

Listed in the CSE, Highest oversubscribed IPO

Acquisition of NAMAL and UB Finance

CFI award for Best SME Bank

TPG through its affiliate Culture Finance Holding strikes landmark deal with Union Bank

New Core-Banking System Implementation

First bank in Sri Lanka to implement Microsoft Cloud Technology

65 branches with access

to over 3,500 Lanka Pay

ATM’S

Introduction of

Transaction Banking

BBB (Stable) rating from

ICRA

UB Brand was ranked 6 notches above in the Top 100 Brands list by Brand Finance.

First Bank to publish Annual Report last two years consecutively.

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First Bank in Sri Lanka to receive the International Payment Card Industry Data Security Standard (PCI DSS) by the Security Standards Council.

UB received overwhelming recognition at the LankaPay TechnnovationAwards winning 4 coveted awards.

Overview - Bank

“The Bank has set the pace for an excellent year of growth with an impressive first quarter performance in 2018 and we will continue to build on this strong balance sheet and profitability to accomplish our envisioned growth objectives for the year. Strengthened by its next three year growth strategy, Union Bank is now ready to take on the next phase of its expansion and growth.”

- CEO

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Financial Performance – Bank (Quarter)

•The Bank recorded an impressive Profit Before Tax and VAT of Rs.246Mn, reporting a 47% growthYoY

•Total Operating Income of the Bank rose to Rs 1,271 Mn, and represented a sharp increase of 26%YoY. Total Operating Expenses on the other hand were well managed and increased by 22% YoY toRs 938 Mn during the quarter, as against Rs 771 Mn reported in the corresponding period in 2017.

•Profit after Tax (PAT) for the 1st quarter of 2018 was Rs. 130 Mn and represented a 37% increase YoY.

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LKR Mn 1Q 2018 1Q 2017

Net interest income 853 767 86 11%

Net fee and commission income 197 166 31 19%

Net Trading and other Operating income 221 78 142 182%

Total operating income 1,271 1,011 260 26%

Operating cost 938 771 167 22%

Pre- impairment Profit 333 240 93 39%

Impairment Charges 109 93 16 17%

Share of subsidiary profits 22 20 2 9%

Profit Before Tax 246 167 79 47%

Taxes ( including VAT & NBT ) 116 72 44 61%

Net profit for the period 130 95 35 37%

Growth

Revenue - Bank

Net Interest Income (Rs. Mn) Non Interest Income (Rs. Mn)

• A focused management of yields saw NetInterest Income (NII) of the Bank record Rs 853Mn during the quarter ended 31st March,which translated to a 11% increase YoY. BothNet Interest Margins (NIM) and spreadsshowed a marked improvement during thereporting period in 2018 compared to the lastquarter of 2017.

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• Net trading and other income was reported at Rs 221 Mn for the quarter under review. A strong performance by the Treasury function resulted in capital gains of Rs 69 Mn in comparison to Rs.11 Mn reported in the corresponding period last year. Income from investments in units recorded a noteworthy growth of Rs 62 Mn following an increased investments in units.

Statement of Financial Position - Bank

• A significant growth in core banking operations contributed to therobust performance of the Bank, during the period under review, whileprudent cost and revenue management drove growth in profits overthe corresponding period in 2017. Loan portfolio grew by 16% YoY andtotal deposits grew by 21% YoY.

• The Bank’s loans and receivables stood at Rs 70,736 Mn while thedeposits base was Rs 69,038 Mn at the end of the quarter.

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57,200 62,719 67,397 70,325 69,038

Mar-17 Jun-17 Sep-17 Dec-17 Mar-18

DepositsLKR Mn

LKR Mn. Mar 2018 Dec 2017

Treasury Assets 33,131 35,279 -2,148 -6%

Loans & Advances 70,736 70,578 158 0%

Cash & Balance with CB 6,426 8,483 -2,057 -24%

Other Assets 4,654 4,667 -13 0%

Total Assets 114,947 119,007 -4,060 -3%

Borrowings 26,313 28,815 -2,502 -9%

Customer Deposits 69,038 70,325 -1,287 -2%

Other Liabilities 1,799 2,009 -210 -10%

Equity 17,798 17,858 -60 0%

Total Equity & Liabilities 114,947 119,007 -4,060 -3%

Growth

100,907 103,247

116,313 119,007

114,947

Mar-17 Jun-17 Sep-17 Dec-17 Mar-18

Total AssetsLKR Mn

61,168

64,047

67,391

70,578 70,736

Mar-17 Jun-17 Sep-17 Dec-17 Mar-18

LoansLKR Mn

Composition of Balance Sheet

Assets Composition

Assets

Loans – 62 %

Treasury Assets – 29%

Funding Composition

Funding

Deposits – 60%

Treasury Borrowings – 23%

Segmental Loan Composition

In line with the Bank’s strategy, Retail assetscomposition have increased to 19% incomparison to 13% in 1Q 2017

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Loan Growth & Capital Adequacy

Loans and Receivables (Rs.Mn) Net Non Performing Asset Ratio

Capital Adequacy Ratio • The Bank has continuously improved its asset quality through a robust risk management frame work and the implementation of rigorous risk management practices that include stringent appraisal processes, strong collections efforts and risk based pricing.

• The Bank continued to maintain its robust Capital Adequacy, reporting a Total Capital Ratio of 19.87% as at the balance sheet date. .

102016 & Q1, Q2 2017 figures are based on Basel II.

Deposit Growth and CASA

Customer Deposits (Rs. Mn) CASA (Rs. Mn)

• Total CASA grew to Rs.16,523Mn which translated to an increase of Rs.3,441Mn over the 1st quarter of 2017. The impressive CASA growth that outperformed the market growth rate, was enabled by focused CASA acquisition strategies driven by the Retail, SME and Corporate Banking segments.

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Key Indicators - Bank

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Mar 2018 Dec 2017

Return on Assets (After Tax), % 0.45% 0.43%

Return on Equity (After Tax), % 2.92% 2.64%

NIM 2.92% 2.87%

NPL Ratio % ( Gross) 3.01% 2.69%

NPL Ratio % ( net) 1.92% 1.76%

Mar 2018 Dec-17

Regulatory Capital Ratios

Common Equity Tier I Capital Ratio

(Minimum Requirement as per Basel III - 4.5 %) 19.87% 18.85%

Tier 1 Capital Ratio

(Minimum Requirement as per Basel III - 7.25 %) 19.87% 18.85%

Total Capital Ratio

(Minimum Requirement as per Basel III - 11.25 %) 19.87% 18.85%

• NIM for the quarter under review would have seen a higher growth if not for the interestexpense on investments in units, the income in respect of which has been recognized asa capital gain under trading income.

Financial Performance – Group (Quarter)

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• Profit Before Tax is up by 38%. Total operating income grew (+22%) at a faster pace than the cost increase (+20%) which resulted in increase in pre impairment profits by 26%. Impairment charge increased by 4%.

• The Group, consisting of the Bank and its two subsidiaries, UB Finance Company Limited and National Asset Management Limited

LKR Mn 2018 Q1 2017 Q1

Net interest income 1,041 922 119 13%

Net fee and commission income 238 204 33 16%

Net Trading and other Operating income 228 109 118 108%

Total operating income 1,506 1,236 270 22%

Operating cost 1,074 892 181 20%

Pre- impairment Profit 433 344 89 26%

Impairment Charges 126 121 5 4%

Profit Before Tax 307 223 84 38%

Taxes ( including VAT & NBT ) 153 103 50 49%

Net profit for the period 154 120 34 28%

Growth

Statement of Financial Position - Group

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• Total assets of the Group was Rs. 123,883 Mn, of which 93% was represented by the Bank.

Mar-18 Dec-17

Treasury Assets 32,752 34,945 (2,193) -6%

Loans & Advances 79,757 79,221 536 1%

Other Assets 4,611 4,592 20 0%

Cash & Balance with CB 6,763 8,843 (2,081) -24%

Total Assets 123,883 127,601 (3,718) -3%

Borrowings 27,743 30,485 (2,742) -9%

Customer Deposits 75,931 76,748 (817) -1%

Other Liabilities 2,454 2,526 (72) -3%

Equity 17,755 17,842 (87) 0%

Total Equity & Liabilities 123,883 127,601 (3,718) -3%

Growth

Corporate Information

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Board of Directors

Name Title

Atul Malik Chairman

Priyantha Fernando Deputy Chairman/ Senior Director

Indrajit Wickramasinghe Executive Director/ CEO

Sow Lin Chiew Non Independent, Non Executive Director

Sabry Ghouse

Yudhishtran Kanagasabai

Independent, Non Executive Director

Independent, Non Executive Director

Ranvir Dewan Non Independent, Non Executive Director

Gaurav Trehan Non Independent, Non Executive Director

Puneet Bhatia Non Independent, Non Executive Director

Michael J. O’Hanlon Non Independent, Non Executive Director

Dilshani Wijayawardana Independent, Non Executive Director

Trevine Fernandopulle Independent, Non Executive Director

Sumedh Jog Alternate Director

Yoke Sun Woon Alternate Director

Leadership Team

Name Title

Indrajit Wickramasinghe Director/ Chief Executive Officer

Hiranthi de Silva Vice President Wholesale Banking

Malinda Samaratunga Chief Financial Officer

Ravi Jayasekera Vice President Human Resources

S. Sri Ganendran Vice President Operations

Chaya Jayawardena Vice President Retail Banking

Suhen Vanigasooriya Chief Risk Officer

Wije Dambawinna Vice President Treasury

Legal Form

A Public Limited Liability Company incorporated in Sri

Lanka under the Companies Act No. 17 of 1982. Re-

registered under the Companies Act No. 7 of 2007. Listed

as a public quoted Company at the Colombo Stock

Exchange in 2011.

A Licensed Commercial Bank under the Banking Act

No. 30 of 1988.

Credit Ratings

ICRA : (SL) BBB Stable

Fitch : BB+ (lka) Positive

Date of Incorporation

February 2nd, 1995

Auditors

Ernst & Young

Chartered Accountants,

No. 201, De Saram Place

Colombo 10