Union Bank to sell off its finance arm…

Further to the captioned article published in the Business Times section of the Sunday Times of 22nd December 2013, this serves as a correction to inform and clarify to the public the incorrect statements made in the said article.

The Union Bank of Colombo PLC together with its Strategic Investment Partner ShoreCap II Limited invested LKR 1.15Bn to acquire a controlling interest in UB Finance Company Limited in November 2011, making it the first Finance Company to be owned by a private sector Commercial Bank. Union Bank and ShoreCap II currently collectively hold an 82% stake in the Company.

UB Finance is held as a Strategic Investment of Union Bank and has been restructured, rebranded and re-launched in the past year making significant headway over this period recording a net profit after tax of LKR 131Mn in the financial year ended 31st March 2013. The Company is managed by a dynamic team of handpicked young professionals from the industry and has articulated an aggressive three year strategic business plan which has been endorsed by the Board of Directors. The Company currently operates through a network of seven branches and its main lines of business include Investments in terms of fixed deposits and savings accounts, asset backed financing in terms of leasing hire purchase and loans, working capital financing in terms of factoring and invoice discounting and real estate solutions. UB Finance serves as a vehicle to better cater to the Small and Medium sized Enterprises which is in line with the overall Business Strategy of the Union Bank Group.      

UB Finance is on a positive trajectory in line with the business strategy and projections of its principle shareholders and is looking forward to a successful listing in 2014, provided that the regulatory and business climate is conducive.

There is no decision to dispose of a controlling interest in the Company at this point of time.