UNB earnings drop 55 percent in Q4

Union National Bank's lending grew seven per cent year-on-year to Dh68.4 billion. Union National Bank, or UNB's reported an all around growth in lending, deposits and assets in the year. The lending grew seven per cent year-on-year to Dh68.4 billion, deposits were up 11 per cent to Dh74.8 billion and assets grew nine per cent to Dh101.9 billion as at December 31, 2015.

However, the lender reported 55 per cent year-on-year drop in its earnings to Dh195 million at the end of the fourth quarter on higher impairment expenses.

The net profits dropped eight per cent yearon-year to Dh1.864 billion as the group recognised higher impairment charges mainly on the commercial and SME portfolios.

The operating profit rose six per cent to Dh2.696 billion in 2015 reflecting underlying growth across its core business segments.

The operating income was up seven per cent year-on-year to Dh3.732 billion. The net interest income and net income from Islamic financing for 2015 was up by 10 per cent mainly due to increase in average interest earning assets and improved net interest margin. The net interest margin rose by 3 basis points from 3.00 per cent in 2014 to 3.03 per cent in 2015.

The non-interest income in the year was marginally lower by three per cent at Dh808 million. The decrease in non-interest income was principally due to lower fair value gain on investment properties of Dh3 million in 2015 on Dh67 million in the previous year partially offset by an increase in net fees and commission income and other operating income.

Mohammad Nasr Abdeen, chief executive officer, Union National Bank said: "The global and regional economies saw considerable headwinds in 2015, with some sharp market movements for various asset classes, including commodities in the second half of the year.