UNB third-quarter profit unchanged as slow loans weigh on growth
Union National Bank, the Abu Dhabi lender, reported unchanged third-quarter net profit as credit growth remained lacklustre and money set aside to cover bad debt and operating expenses rose.
Net income for the quarter was flat at Dh410 million in the three months ended September compared to same figure in the same period last year. Net interest and Islamic financing income rose 1 per cent to Dh675m from same quarter last year.
“The UNB Group posted yet another quarter of sustained profitability on the back of strong balance sheet, increased momentum in consumer banking and ongoing cost management,” Mohammad Nasr Abdeen, the bank’s chief executive, said in a regulatory filing to the Abu Dhabi Securities Exchange.
“As the credit growth locally remains muted, the group is managing its lending on a selective basis and continues to diversify its revenue streams by growing the fee related business during the year.”
Net impairment charges on financial assets rose 18 per cent to Dh227m in the third quarter from Dh192m in the same period last year. Non-interest income advanced 9 per cent to Dh257m in the third quarter compared to Dh235m, the bank said.
Slow lending has crimped the profitability of some banks in the UAE over the past year amid sluggish economic growth and subdued consumer confidence in the wake of a three-year oil slump, with crude prices falling by more than half of their 2014 highs.
Net profit for the first nine months of the year increased 9 per cent to Dh1.3 billion as net income tax expense fell 46 per cent and non-interest income increased 18 per cent.
In July, UNB reported that its second-quarter net profit rose 7 per cent, boosted by non-interest income.
Net profit for the three months ended June 30 was Dh506m compared to Dh472m a year earlier.
Slow lending has crimped the profitability of some UAE banks amid sluggish growth and subdued consumer confidence