UNB’s AED922mn H1profit

Abu Dhabi / Emirates Business

Union National Bank (UNB), one of the leading banks based in the United Arab Emirates, recorded a profit of AED 922 million for the first half of 2016 down by 22% year-on-year. The profit for the second quarter of 2016 of AED 472 million was up by 5% compared to the first quarter of the current year.
Commenting on the results, Mohammad Nasr Abdeen, Chief Executive Officer, Union National Bank said “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. He further commented “The 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”.
The operating profit for the first half of the year was AED 1,158 million, down by 17% over the same period of prior year. The operating income for the six month period ended 30 June 2016 was lower by 12% to AED 1,680 million compared to the corresponding period of previous year.
The cautious approach through tighter underwriting standards and selective booking of quality assets led to a more moderate growth in loans and advances impacting revenues. The tighter liquidity environment has led to a higher cost of deposits with the net interest income being adversely impacted by 15% to AED 1,259 million in H1-2016. As a result, the net interest margin has reduced by 52 bps to 2.64% in the first half.
Loans and advances were up by 4% year-on-year to AED 70.1 billion as at 30 June 2016 and were up by 2% compared to the prior year end.