UNB net profit rises 20pc to Dh627 million in first half

ABU DHABI — Union National Bank (UNB) continued with growth and expansion for the seventh consecutive year as net profit for the first half of 2006 increased by 20.10 per cent to Dh627.34 million over Dh522.35 million in the corresponding period last year.

By Haseeb Haider

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Published: Sun 23 Jul 2006, 11:01 AM

Last updated: Sat 4 Apr 2015, 3:14 PM

The bank's loans and advances rose by 30.22 per cent growing from Dh17.08 billion as on June 2005 to reach Dh22.25 billion as on June 2006. This growth was the main factor behind the bank's total assets growing from Dh27.14 billion to Dh33.82 billion, an increase of 24.59 per cent for the same period.

Customer deposits also showed a rising trend by increasing 18.02 per cent during the first half of 2006, reaching Dh23.59 billion from Dh19.99 billion during the comparable period last year.

Despite operating expenses increasing by 35.99 per cent on a year-on-year basis, the cost/income ratio increased from 19.77 per cent as on June 2005 to 21.13 per cent as on June 2006, reflecting the bank's determination to maintain efficiencies while continuing to grow across various business segments and enhance its infrastructural capabilities.

The bank's annualised 'return on average assets' for the first half of 2006 is 4.11 per cent while the return on average equity is a high 30.78 per cent. Given that the bank's total equity has risen by 113 per cent over the previous period, the continued strength in the return on average equity' shows the bank's focus on its core earnings.

UNB's high asset quality and conservative lending policies have been rewarded by an upgrade in its credit ratings. Capital Intelligence has upgraded its foreign currency long term rating from A to A+ and the foreign currency short term rating from A2 to A1, putting UNB's foreign currency ratings at the same level as the foreign currency ratings assigned to the UAE. In addition, the financial strength rating was upgraded from A- to A while the outlook for the financial strength rating remained positive.

In June 2006, UNB jointly arranged a $160 million syndicated loan for a major Saudi group, to finance the construction of a multi-storey tower in the Holy City of Makkah, Saudi Arabia. Besides being the mandated lead arranger to the project, UNB is also nominated as the facility agent.

To support the regional aspirations, UNB is to enter the Egyptian banking sector through its recent successful acquisition of the Alexandria Commercial and Maritime Bank.



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