Union Bank profits soar while asset quality improves

Chairman Dinesh Weerakkody

Director/CEO Dilshan Rodrigo

Union Bank of Colombo PLC reported sharply higher profits for the three months ended in December 2025, the bank’s financials showed, as the banking sector earnings wrapped up.

The bank reported earnings of 30 cents a share or Rs.307.59 million for the October-December quarter, up 64 percent from the same period in 2024.

These profits were reported on the back of a net interest income of Rs.1.86 billion, up 24 percent from the same period a year ago.

The bank managed to slightly increase its net interest margin to 3.5 percent, from 3.4 percent at the beginning of the year, at a time when almost all banks reported narrowing margins.

Another highlight was the significant improvement in the bank’s asset quality, as measured by the so-called Stage 3 loans ratio, which came down to 8.1 percent by the end of the year, from as high as 12.3 percent.

The bank noted going after some of the longstanding large ticket loans in default to get them recovered.

It appears that the efforts have been successful in 2025.

Union Bank also gave loans worth Rs.29.8 billion in 2025, at a growth rate of 33.8 percent.

The leases grew by Rs.4.1 billion and pawning loans grew by Rs.3.91 billion during the year.

The bank set aside Rs.179.21 million for possible loan losses from a provision reversal of Rs.52.22 million a year ago.

Union Bank saw its fee incomes rising by a strong 31 percent to Rs.476.86 million in the quarter.

The bank meanwhile raised deposits worth Rs.15.06 billion.

Last week, Union Bank announced it is raising debentures to raise up to Rs.3.0 billion for five years.

Meanwhile, for the full year, the bank reported earnings of 6 cents a share or Rs.644.73 million, up 117 percent.

Culture Financial Holdings Limited has a 70.84 percent stake in the bank.