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

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.