UNB earns Dh922m profits in the first half of 2016

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Union National Bank (UNB), one of the leading banks of the UAE, earned Dh922 million profit in the first half of 2016, it was announced in a press release. It is down 22% year-on-year. The profit for the second quarter of 2016 – at Dh472 million – was 5% higher than the first quarter of the current year.

“Given the generally uncertain global economic outlook, the UNB Group maintained its strategy to selectively pursue growth focussing on good quality assets while managing the downside risks, the Chief Executive Officer of the UB, Mr Mohammad Nasr Abdeen, said. The UNB group’s balance-sheet continues to remain strong coupled with adequate liquidity and capital buffers as the region continues to adjust to an environment of lower oil prices, he added.

The operating profit for the first half of the year was Dh1,158 million, down 17% over the same period of the last year. The operating income for the six month period, ending on 30 June 2016, was lower by 12% to Dh1,680 million compared to the corresponding period of the previous year.

Loans and advances were up by 4% year-on-year to Dh70.1 billion as on 30 June, 2016, and were up by 2% compared to the last year. The investment portfolio increased by 19% year-on-year to Dh18.5 billion. The total assets of the group increased slightly over the previous year.

Customers’ deposits

Customers’ deposits remained almost unchanged at Dh73.3 billion as compared to the corresponding period in the previous year. The group’s liquidity position remains comfortable with the liquid assets, including investments constituting 27.1% of the total assets as on 30 June 2016 (30 June 2015: 30.6%). Liquidity measures remained satisfactory with the loan to deposit ratio being 95.6% and the advances to stable resources ratio at around 88%, much below the regulatory threshold. The bank has been complying consistently with the regulatory requirement of Eligible Liquid Assets ratio which came into effect from the second half of the last year.

The operating expenses continued to be managed efficiently and were nominally up by 1% over the same period of 2015. The cost income ratio of the group for the first half was at 31.1%. 

During the first half, the ratio of non-performing loans and advances to gross loans and advances was relatively stable at 3.6% as on 30 June 2016 (31 December 2015: 3.5%) with overall loan loss coverage at 102.4% as on 30 June 2016 (31 December 2015: 107.7%). The impairment charge on financial assets during the first half of 2016 was Dh198 million (H1-2015: Dh186 million).

The UNB Group’s capital position has remained strong with the Basel II capital adequacy ratio computed in accordance with the Central Bank of the UAE guidelines being 19.2% as on 30 June 2016 (31 December 2015: 19.4%) with the Tier I capital adequacy ratio of 18.1% as on 30 June 2016 (31 December 2015: 18.3%).    Both these ratios are well above the minimum requirements set by the Central Bank of the UAE.

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