Page 5 - UBF AR 2018 - E Version
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Chairman’s Message listing remains a priority for the Company
but prudent consideration of the market
Dear Shareholders, environment would precede such a move in the
I am pleased to present to you on behalf of the new financial year. Further a capital infusion is
Board of Directors of UB Finance the Annual envisaged from a strong foreign investor from
Report and Audited Financial Statements for Asia with a long term view which would further
the year ended 31st March 2018. strengthen the listing expectation.
Economic Overview SMEs drive 65% of the economy and UB Finance
Our Company operated in a business environment is deeply engaged with this segment of the
pegged by moderate growth with GDP population. As with other South East Asian
recording a 3.1% growth in 2017 compared to countries Sri Lanka too is on the cusp of a SME
the 4.5% hit in 2016. Real economic activity was led growth driven consumption rise which is
dampened by weather, resulting in a slowdown already reflected in the economic trends. The
particularly in the agriculture sector but having Company’s infrastructure build-up is targeted
implications on overall consumption patterns. towards the milestone of per-capital income
Meanwhile the Non-Banking Financial Sector crossing the USD 5,000 mark.
which represents 7.9% of Sri Lanka’s financial Operations
system also grew moderately. In tandem with During the financial year we witnessed a healthy
the macro economy the sector reached Rs. upward financial momentum; our balance sheet
1,355 Bn by the end of 2017 with a growth of remains strong while our bottom line is in
11.8% versus 21.7% enjoyed the year before. positive territory as the Company continues to
Steps taken by the Government to curtail credit reinforce the operation and governance base
growth and further tightening of the Loan to to ensure sustainable and progressive business
Value Ratio resulted in a slower growth in the expansion.
NBFI sector. The company growth remained 10-15% below
The Central Bank of Sri Lanka reports that potential with a further equity call taking
during the year the sector remained strong, precedence over investing in operational
with capital maintained at healthy levels along expansion. Performance during the year was
with adequate liquidity buffers well above impacted by stagnated consumer spend,
the regulatory minimum levels. NBFI sector and reduction of imports in certain vehicle
now demonstrates a shift in funding mix, as categories. However our existing loyal
increased assets were mainly funded through customers repeat business and their refferals
deposits while borrowings of the sector declined contributed towards UBF maintaining above
compared to the high growth recorded during industry performance. Interest rates also
the previous year. The Central Bank continued continued to be a source of concern to the
to take prudential measures to maintain the financial sector.
stability of the sector with much consideration UB Finance operates 17 branches predominantly
on reviving the companies with weak financial in the western province, and the Company
positions. continues to tap into the 67 branch-strong
Strategic Goals network of our shareholder Union Bank to
The Company continued its three-pronged focus generate more referral business islandwide.
on improving operational efficiencies towards Company restructure in terms of systems,
delivery of a competitive service, improving and processes and governance is on track with
introducing new products to meet the current all operational divisions maintaining a robust
economic conditions while strengthening the working dynamic. In terms of technology,
financial position of the Company. planned and systematic digitalization in a timely
The Company achieved its corporate manner remains our focus towards enhancing
objectives during the year under review our back end operations while we continue
despite macro-economic challenges and fiscal to strive to excel in service which has been
policy inconsistencies. The prevailing market our consistent forte. Our product innovation
conditions and business environment did not team continues its efforts to formulate cutting
incentivize the Company to pursue the intended edge asset and liability products in keeping
public listing which would not have yielded the with current financial trends and changes in
desired value creation for its investors. Public taxation. Our marketing strategy is targeted
and result-oriented while our campaigns push
Annual Report 2018 the limits of creativity.
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