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Monday June 3rd, 2024

Union Bank of Colombo June net up on tax reversal, net interest income

ECONOMYNEXT- Profits at Sri Lanka’s Union Bank of Colombo (UBC) group grew 53 percent to 205 million rupees helped by a tax provision reversal and net interest income growth, despite higher bad loans, interim accounts show.

Earnings per share for the quarter was 19 cents for the group, which includes the bank and two subsidiary non-bank finance firms. For the six months to June the group reported earnings of 20 cents per share on total profits of 323 million rupees, which grew 17 percent.

The UBC share closed trading at 12 rupees on Tuesday, up 20 cents.

Interest income at group level grew 10 percent to 3.9 billion rupees from a year earlier, interest expenses were up 8 percent to 2.5 billion rupees and net interest income grew at a faster 13 percent to 1.3 billion rupees.

The central bank has imposed price controls on deposit rates in banks, lowering interest costs.

At group level, loans growth was flat at 82 billion rupees. At bank level gross loans grew one percent to 74.2 billion rupees.

Bank-level non-performing loans had grown to 5.4 percent in June from 3.68 percent in March.

Provisioning for bad loans grew 50 percent to 164.3 million rupees.

"Prudent risk management and stringent credit policies helped the Bank to keep the NPLs at manageable levels at a time when the SMEs were greatly affected by the challenging economic conditions," the firm said.

"A 10-year loan product (BML) for the sector was introduced during the period."

Net fee and commission income fell 1 percent to 215.6 million rupees.

Other operating income of the group fell 107 percent to 5.2 million rupees due to a low foreign exchange business.

"This was mainly due to a significant reduction in trade business stemming from the macro economic challenges of the quarter," the bank said.

There was an income tax reversal of 22 million rupees for the June quarter against a provision of 103 million rupees, helping boost profits.

But value added tax and a debt repayment levy increased other taxes 62 percent to 191 million rupees.

The bank’s total assets were 130.4 billion rupees at end-June, down 3 percent from the start of the financial year and end-December.

Net assets per share was 15.55 rupees, up from 14.90 rupees in the six-month period.

Deposits fell 6 percent to 81 billion rupees, while borrowings from banks grew 38 percent to 13.1 billion rupees.

The bank-level capital adequacy fell to 17.23 percent from 17.41 percent, remaining above the regulatory minimum of 12.5 percent. (Colombo/Jul23/2019)

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Water levels rising in Sri Lanka Kalu, Nilwala river basins: Irrigation Department

Sri Lanka Navy assisting in rescue operations (Pic courtesy SL Navy)

ECONOMYNEXT – Sri Lanka’s Irrigation Department has issued warnings that water levels in the Kalu and Nilwala river basins are rising and major flooding is possible due to the continuous rain. People living in close proximity are advised to take precautions.

“There is a high possibility of slowly increasing prevailing flood lowline areas of Kiriella, Millaniya, Ingiriya, Horana, Dodangoda, Bulathsinhala, Palinda Nuwara and Madurawala D/S divisions of Ratnapura and Kalutara Districts, up to next 48 hours,” it said issuing a warning.

“In addition, flood situation prevailing at upstream lowline areas of Ratnapura district will further be prevailing with a slight decrease.

“The residents and vehicle drivers running through those area are requested to pay high attention in this regard.

“Disaster Management Authorities are requested to take adequate precautions in this regard.”

The island is in the midst of south western monsoon.

DMC reported that 11,864 people belonging to 3,727 families have been affected due to the weather in Rathnapura, Kegalle, Kilinochchi, Jaffna, Mullaitivu, Kalutara, Gampaha, Colombo, Galle, Matara, Hambantota, Puttalam, Kurunegala, Kandy, Nuwara Eliya, Anuradhapura, Polonnaruwa, Badulla, Moneragala, and Trincomalee districts.

Meanwhile, the Meteorology Department stated that showers are expected on most parts of the island today.(Colombo/June3/2024)

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UNP gen secy defends call for postponing Sri Lanka poll, claims opposition silent

The UNP party headquarters in Pitakotte/EconomyNext

ECONOMYNEXT — United National Party (UNP) General Secretary Palitha Range Bandara has defended his call for postponing Sri Lanka’s presidential election by two years, claiming that his proposal was not undemocratic nor unconstitutional.

Speaking to reporters at the UNP headquarters Monday June 03 morning, Bandara also claimed that neither opposition leader Sajith Premadasa nor National People’s Power (NPP) leader Anura Kumara Dissanayake have spoken against his proposal.

“I have made no statement that’s undemocratic. My statement was in line with provisions of the constitution,” the former UNP parliamentarian said.

He quoted Section 86 of Chapter XIII of the constitution which says: “The President may, subject to the provisions of Article 85, submit to the People by Referendum any matter which in the opinion of the President is of national importance.”

Sections 87.1, 87.2 also elaborates on the matter and describes the parliament’s role, said Bandara.

“I spoke of a referendum and parliament’s duty. Neither of this is antidemocratic or unconstitutional. As per the constitution, priority should be given to ensuring people’s right to life,” he said.

“Some parties may be against what I proposed. They may criticse me. But what I ask them is to come to one position as political parties and make a statement on whether they’re ready to continue the ongoing economic programme,” he added.

Bandara claimed that, though thee has been much criticism of his proposal for a postponement of the presidential election, President Wickremesinghe’s rivals Premadasa and Dissanayake have yet to remark on the matter.

“I suggested that [Premadasa] make this proposal in parliament and for [Dissanayake] to second it. But I don’t see that either Premadasa nor Dissanayake is opposed to it. To date, I have not seen nor heard either of them utter a word against this. I believe they have no objection to my proposal which was made for the betterment of the country,” he said. (Colombo/Jun03/2024)

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300 of 100,000 trees in Colombo considered high risk: state minister

ECONOMYNEXT – Trees in Sri Lanka’s capital Colombo are being monitored by the municipal council, Army and Civil Defense Force as the severe weather conditions continue, State Minister for Defense Premitha Bandara Tennakoon said.

“Within the Colombo Municipal Council city limits, there are 100,000 trees. Of these, around 300 are considered high risk,” Tennakoon told reporters at a media conference to raise awareness about the current disaster management situation.

Not all trees required to be cut down he said. “We can trim some of the branches and retain them.”

The problem was that buildings in the vicinity of the tree had cut branches on one side, causing it to become unbalanced, the minister said.

New laws would be brought in so provincial/municipal institutions could strengthen enforcement of building codes.

“We don’t have a single institution that can issue a warning about a tree. Not one to tell us what trees can or cannot be planted near a road.

“Trees should be suitable for the area. Some trees have roots that spread and damage roads, buildings. When the roots can’t go deep, they tend to topple over.

“Now Environment Day is coming up, and anyone can go plant a tree by the road. We have to take a decision about this. We have to enforce laws strongly in future.” (Colombo/June3/2024)

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