Union Bank lending surges in March quarter, earnings dip 7%

Dinesh Weerakkody – Chairman	Dilshan Rodrigo - CEO

Union Bank of Colombo PLC accelerated lending in the March 2025 quarter, signalling a strategic shift under new ownership as improving credit conditions spur competition among lenders.

The bank, which holds assets worth Rs.161.34 billion, disbursed Rs.11.61 billion in loans during the first three months of the year, recording a 13.1 percent increase. It ended the quarter with a total gross loan portfolio of Rs.99.87 billion.

Deposits rose by Rs.2.18 billion or 2.1 percent to Rs.105.92 billion.

Net interest income stood at Rs.1.51 billion, down 2 percent from the same period a year earlier. Interest income and expenses declined by 11 percent and 15 percent respectively, as falling interest rates during the quarter re-priced the bank’s assets and liabilities,despite their growth. As a result, the net interest margin slipped to 3.3 percent from 3.4 percent in the previous quarter. Despite the strong loan growth, impairments—or provisions made for possible bad loans—showed a reversal of Rs.19.13 million, compared to provisions of Rs.278.33 million in the corresponding period last year.

The bank, which had a relatively high Stage 3 loan ratio, reduced it to 11.0 percent by end-March 2025 from 12.3 percent at end-2024. Union Bank reported earnings of 4 cents per share, or Rs.46.0 million, in the January–March quarter, compared with 5 cents per share, or Rs.49.60 million, in the same period in 2024, marking a 7 percent decline. Net fee and commission income rose by 4 percent to Rs.313.67 million.

Union Bank operates with two subsidiaries: National Asset Management Ltd. and UB Finance PLC. The bank is undergoing rapid transformation following the acquisition of its controlling stake by CG Capital Partners Global Pte. Ltd.—an affiliate of the CG Corp Global conglomerate—via Culture Financial Holdings in 2023. The entity held a 70.84 percent stake in the bank as of 31 March 2025.