UNB Q1 net up 26pc on higher interest income
Abu Dhabi, April 28, 2010
Union National Bank on Wednesday reported a 26-per cent rise in net profit due to higher interest income from Islamic lending.
UNB said its net profit was 379.2 million dirhams ($103.3 million) in the quarter, up from 300.7 million dirhams in the same period last year. The bank booked an impairment loss of Dh91.39 million.
Net interest income and income from Islamic financing was Dh477.3 million, up from 381.1 million dirhams in the prior year.
'The revenues are strong and allowed the bank to offset higher provisions on a year on year basis,' analyst Sofia El Boury at Shuaa Capital said. 'It outperformed our estimates by 16 percent on higher than expected top line growth.'
Total assets of the bank decreased to 73.11 billion dirhams in the first quarter, from 75.72 billion dirhams at the end of the fourth quarter.
Loans and advances remained flat around 50.61 billion dirhams while deposits fell to 48.11 billion dirhams from 51.27 billion dirhams from the prior quarter.
The bank said in March it planned to double its share capital base to 5 million dirhams.
UAE lenders suffered a tough year in 2009 as a regional property boom came to an end and banks were forced to book hefty provisions against bad debt.
Moody's recently warned that adverse economic conditions could continue putting pressure on UAE banks' results. Banks exposure to indebted Dubai World was manageable, the ratings agency said.-Reuters