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Sun 20 Jul 2014 01:19 PM

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UAE's Union National Bank reports 5% rise in Q2 net profit

Fifth largest lender on Abu Dhabi exchange says lower impairments led to better performance in second quarter

UAE's Union National Bank reports 5% rise in Q2 net profit

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.