| PLUS| HOME PAGE | FRONT PAGE | EDITORIAL/OPINION | NEWS / COMMENT | TIMESPORTS
Union Bank, established in July 1995, has registered an excellent all-round performance for a new bank recording a deposit base of Rs. 750 million, assets of Rs. 1000 million and a net profit of Rs. 2 million in just six months.
"We were able to achieve and, in fact, exceed the targets which we set for ourselves," says Chairman Chanaka de SiIva. "The results indicate that we are on the right track".
He is happy the Bank was able to achieve these results in an year which saw a dramatic change in the country's situation and business activity which naturally dampened any desire to establish new banking relationships. The steep rise in inter-bank deposit rates and the Treasury Bill rates also had an adverse effect on the Bank's ability to mobilize deposits at reasonable rates.
Discussing the Bank's initial business strategy, Mr. de Silva says that the main focus is on servicing the needs of successful entrepreneurs and corporate businesses. "With the fierce competition that prevails with 24 banks in operation, it is important for a new entrant to carve out a 'niche' for itself for success. We believe this is an important segment which is not adequately served by the present banking system and more particularly by the indigenous Sri Lankan banks," he adds.
Union Bank hopes to grow in this market exploiting its potential to the full while extending its services to other sections of the community on a selective basis. The Bank will also take the technology route in expanding operations rather than use the price mechanism. "Our aim is to present a comprehensive range of investment options to our clients in addition to providing the normal commercial banking service," Chairman de Silva says.
"In keeping with our theme 'The spirit of innovative banking' and our commitment to grow in the prevailing competitive environment by introducing innovative products and services, we have delivered during the short period of six months a number of new products never before seen in this country and in one case (Screen Phones) for the first time in South Asia," he points out.
Making his observations on the economic outlook, Mr. de Silva says that the country is facing severe economic and political challenges such as a rising fiscal deficit, inflation and unemployment, labour discontent, high defense spending, sluggish stock market and finding a permanent solution to the north-east problem. These issues must be addressed and tackled by the government with a sense of urgency if the Sri Lankan economy is to perform to its full potential, he stresses.
He suggests that the immediate government focus, apart from finding a permanent solution to the north-east problem, is the implementation of a successful privatization programme which in the short term will reduce government debt, lower capital expenditure, and then set the stage for long term private sector growth, possibly revitalizing the stock market.
Elaborating on the Bank's activities, Managing Director S. Shanmuganathan says that the Bank is no more a new entrant to the industry, but is now a key player earning a name for delivering innovative products combined with advanced technology. "We stand apart from competition because our focus is different. Moving away from building up large Balance Sheets and network of branches, we are redefining banking as a business of managing risk, both for ourselves and for our customers. We will not adopt a 'broad brush' approach in an attempt to be all things to all people. Concentrating on an identified clientele, we offer a wide range of financial services and products never before made available in this country", he says.
"We are a private label and not a brand name", he explains. "Exceptionally personalized service and relationship banking are the halImarks of our efforts".
Insisting that at Union Bank the customer is not a mere account number, he says that he or she is a person with whom the Bank works in actualizing their financial goals through provision of innovative solutions. "This positioning has certainly given us the initial momentum and we believe will certainly carry us through in achieving our vision to be the preferred banker providing the most convenient banking services in our chosen markets", Mr. Shanmuganathan adds.
Union Bank has made significant strides already in the sphere of Information Technology. Noteworthy achievements are the introduction of Screen Phones, a 'first' in South East Asia, installation of a comprehensive 24 hour Phone Banking service and the link-up with Internet via the bank's own web service making Union Bank the first commercial bank in Sri Lanka to do so. Screen Phone represents the most convenient way for a client residing overseas to communicate with the Bank.
The primary focus of the Bank in 1996 will be to bring down the cost of funds by increasing the savings account base, conversion of call deposits to time and savings deposits which are more stable in nature, increase its presence by opening at least two branches and two more discount offices, build up a quality loan portfolio and continue to deliver innovative products.
Paying a tribute to the skills and dedication of the staff, Mr. Shanmuganathan says that the Bank is fortunate to have a dream team of self motivated, target oriented superior performers who project the Bank as a union of some of the best banking minds in the country.
Serving on the Board of Directors are Chanaka de Silva (Chairman), Shan Shanmuganathan (Managing Director), Moksevi R. Prelis, Lalin J. Fernando, D.L. Kannangara and D. Shanmugasunderam.
Return to the Business contents page
Please send your comments and suggestions on this web site to
firstname.lastname@example.org or to