UAE lender UNB Beats Forecasts Slightly With 5.6% Q2 Profit Gain

The lender reported a net profit of Dhs515.6 million for the three months to June 30, up from Dhs488.3 million in the same period last year.

Union National Bank, 50 per cent owned by the Abu Dhabi government, edged ahead of analysts’ forecasts as it posted a 5.6 per cent increase in second-quarter net profit on Sunday due to lower impairments.

The fifth-largest lender on the Abu Dhabi exchange by market value reported a net profit of Dhs515.6 million ($140.4 million) for the second quarter, up from Dhs488.3 million in the same three-month period last year, a bourse filing said.

Five analysts polled by Reuters forecast an average profit of Dhs499.6 million for the quarter.

A reduction in impairments, which more than halved year-on-year to Dhs46 million in the second quarter, supported the profit gain.

“The asset quality continues to improve with the non-performing loans reducing both on an absolute basis also relative to the gross loans,” Mohammad Nasr Abdeen, chief executive of UNB, said in the statement.

The fall helped to offset a 3.3 per cent drop in UNB’s net interest income, which dipped to Dhs654.9 million as a slight gain in loan growth was offset by a decline in the margin it earned on its lending.

Loans and advances increased three per cent year-on-year to stand at Dhs62 billion on June 30 while deposits jumped 16 per cent over the same timeframe to Dhs67 billion.