UNB Q4 net rises, provisions weigh
Dubai, January 31, 2010
Fourth-quarter net profit at Union National Bank (UNB) more than tripled but missed forecasts as customer deposits and bad loan provisions both grew.
Earnings at Abu Dhabi's fifth-largest bank by market value came in at Dh222.1 million ($60.47 million), the bank said, compared with Dh65.8 million in the same period last year and analyst expectations of Dh254.5 million.
The Abu Dhabi-listed bank said full-year net profit fell 20 per cent to Dh1.16 billion from Dh1.44 billion in 2008.
'The challenging credit conditions have resulted in increased delinquencies in line with the global trends,' according to the bank.
Many banks in the UAE have seen provisioning levels on the rise due to the global downturn and the debt trouble at two major Saudi firms, putting pressure on their profitability.
Earlier in January, Abu Dhabi Commercial Bank (ADCB) posted a Dh1.2 billion fourth-quarter loss as it booked over Dh2 billion in provisions related to the crisis.
First Gulf Bank (FGB.AD) reported a 27-per cent rise in fourth-quarter net profit.
'Overall, UNB's results are decent, much better than ADCB although not as strong as FGB,' said a Dubai-based analyst.
UNB said the increase in non-performing loans was 'partly due to the group's exposure to Al Gosaibi, a Saudi-based group which was recognised as a non-performing advance in 2009.'
The bank's board of directors has proposed a stock dividend of 10 per cent.
At 0820 GMT, shares in UNB rose 6 per cent as the Abu Dhabi index traded slightly lower.-Reuters