KARACHI (February 18 2004): After four years of dry run the Union Bank is to pay 10 percent cash dividend and 10 percent bonus shares to the shareholders as the profit for 2003 surged by 97 percent over 2002.
The Union Bank announced on Tuesday the results for the financial year 2003. The year consolidated the position of the bank as a strong financial institution and all the major indicators showed an upward trend.
Profit before tax for the year grew to Rs 566 million as against Rs 286 million in 2002.
This shows a growth of 98 percent as compared to the previous year. Profit after tax aggregated to Rs 428 million as against Rs 163 million in 2002. This is after writing-off all the intangible costs of Bank of America, Emirates Bank, American Express Bank and Mashreq Bank's franchise in Sri Lanka acquisitions, amounting to Rs 691 million, during the year.
The total assets at the year-end stood at Rs 67 billion as compared to Rs 56 billion in 2002, showing a growth of 21 percent.
Total deposits increased to Rs 50 billion from Rs 37 billion, a year before, showing an increase of 34 percent.
Advances by the bank grew to Rs 40 billion, an increase of 40 percent from Rs 29 billion recorded last year.
The board of directors has decided to declare a 10 percent cash dividend and 10 percent bonus shares.
Union Bank's credit rating was upgraded significantly in 2003. JCR-VIS declared the bank's credit rating being A+/A1 with a stable outlook, whereas Pacra assigned A+& A1 rating to the bank for long-term and short-term, respectively.
The strong performance of the Union Bank in 2003 suggests that the bank has continued to reap benefits from the intensive growth strategy it decided to follow four years back.
Union Bank now stands among the fastest growing private sector banks in Pakistan.
It has opened nine new branches in 2003, increasing the branch network to 42 branches in 19 cities across Pakistan.
The bank continued to follow an aggressive growth strategy in consumer banking. By the end of 2003, the Union Bank was among the fastest growing card issuers in Pakistan.
The bank was also among the market leaders in the programme-based personal and business finance categories, with highly successful products Ready Cash and Business Power.
In similar fashion, the Union Bank has become one of the forerunners in auto and home financing and a number of highly attractive liability products, including Business Account, which offers inter-branch transaction facility across 19 cities in Pakistan.
The bank in 2003 took a major step towards accomplishing its vision of becoming a premier bank in the emerging markets.
The acquisition of Mashreq Bank's franchise in Sri Lanka laid the foundation of Union Bank's offshore network. Sri Lanka provided Union Bank with a suitable platform to launch its international operations because of the cultural and economic resemblance between the two countries and the recent efforts by the two governments to enhance bilateral ties, especially in the area of commerce and trade.