Fifth largest lender on Abu Dhabi exchange says lower impairments led to better performance in second quarter
Union National Bank, 50 percent owned by the Abu Dhabi government, edged ahead of analysts' forecasts as it posted a 5.6 percent increase in second-quarter net profit on Sunday due to lower impairments.
The fifth-largest lender on the Abu Dhabi exchange by market value reported a net profit of 515.6 million dirhams ($140.4 million) for the second quarter, up from 488.3 million dirhams in the same three-month period last year, a bourse filing said.
Five analysts polled by Reuters forecast an average profit of 499.6 million dirhams for the quarter.
A reduction in impairments, which more than halved year-on-year to 46 million dirhams in the second quarter, supported the profit gain.
"The asset quality continues to improve with the non-performing loans reducing both on an absolute basis also relative to the gross loans," Mohammad Nasr Abdeen, chief executive of UNB, said in the statement.
The fall helped to offset a 3.3 percent drop in UNB's net interest income, which dipped to 654.9 million dirhams as a slight gain in loan growth was offset by a decline in the margin it earned on its lending.
Loans and advances increased 3 percent year-on-year to stand at 62 billion dirhams on June 30 while deposits jumped 16 percent over the same timeframe to 67 billion dirhams.