UNB third-quar­ter profit un­changed as slow loans weigh on growth

The National - News - - BUSINESS - MAH­MOUD KASSEM

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

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