May 12, 2014 / 5:37 AM / in 4 years

UPDATE 1-Abu Dhabi's Union National Bank Q1 net profit rises 3.5 pct

* Q1 net profit 512.1 mln dhs vs 494.9 mln dhs yr-ago - statement

* Q1 provisions 44 mln dhs vs 127 mln dhs yr-ago

* Q1 net interest margin 2.80 pct vs 3.06 pct in yr-ago period (Changes dateline, adds detail and context)

ABU DHABI, May 12 (Reuters) - Union National Bank (UNB), 50 percent owned by the Abu Dhabi government, posted a 3.5 percent rise in first-quarter net profit on Monday due to lower provisioning, beating estimates of analysts who had expected its earnings to shrink.

The fifth-largest lender on the Abu Dhabi exchange by market value reported a net profit of 512.1 million dirhams ($139.4 million) in the quarter, up from 494.9 million dirhams a year earlier, according to a bourse filing.

Six analysts polled by Reuters had on average forecast that UNB’s profit would fall 3.9 percent, although their forecasts were based on a slightly different figure that excludes profit owed to minority shareholders of the bank’s subsidiaries.

Under this figure, net attributable profit, UNB’s net profit rose 3.6 percent to 509.1 million dirhams.

Banks in the United Arab Emirates have reported strong earnings growth for the first quarter as they benefit from the improving economic picture in the Gulf Arab nation, especially in the key real estate sector which was buffeted following a 2009 crash.

“The increase in the quarterly profit for the group was driven by consistent business growth underpinned by continuing improvement in the asset quality measures, robust liquidity and strong capital position,” Mohammad Nasr Abdeen, chief executive of UNB, said in the statement.

UNB’s profit increase was aided by a 65 percent reduction in impairment charges, which fell to 44 million dirhams in the first quarter of 2014.

This helped to offset a 4 percent decline in net interest income and income from Islamic financing, which fell due to a reduction in its net interest margin to 2.8 percent in the first quarter of 2014 from 3.06 percent in the same period last year.

National Bank of Abu Dhabi’s Chief Executive Alex Thursby had warned following its first-quarter earnings that net interest margins - the gap between the rate a bank pays out on deposits and the rate it charges for lending - were under pressure at UAE lenders from fierce competition and global interest rate pressure.

UNB, like other UAE banks, reported a big jump in lending on the back of strong economic growth in its home market. Loans and advances were up 6 percent year-on-year to 61.7 billion dirhams on March 31.

Customer deposits fell 2 percent over the same timeframe to 66.7 billion dirhams. ($1 = 3.6730 UAE Dirhams) (Reporting by Stanley Carvalho and Olzhas Auyezov; Editing by David French)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below