UNB records 7% jump in lending

The Union National Bank's customer deposits rose two per cent to Dh74.8 billion.

Union National Bank reported seven per cent year-on-year rise in loans and advances to Dh73.6 billion at end of the nine-month period ended 30 September 2016.
Loans were up by eight per cent compared to the prior year end as the lender continued to selectively grow both its consumer and corporate Banking business.
The investment portfolio increased by 24 per cent year-on-year to Dh19.4 billion as at 30 September 2016 to comply with liquidity norms and to optimize the overall balance sheet returns.The total assets increased by four per cent year-on-year and by three per cent over prior year end.
Customer deposits rose two per cent to Dh74.8 billion at the end of the nine months period.The lender's liquidity position remains comfortable with the liquid assets, including investments constituting 26 per cent of the total assets as at 30 September 2016, against 28.4 per cent in the corresponding period.
Non-interest income for the nine month period ended 30 September 2016 compared to the corresponding period of 2015 was up by five per cent to Dh656 million due to increase in gains from dealing in foreign currencies, derivatives and net investment income.
Union National Bank's earnings dropped 20 per cent to Dh1.332 billion for the nine month period ended 30 September 2016 from Dh1.669 billion. The profit for the quarter ended 30 September 2016 slipped 15 per cent to Dh410 million, from Dh483 million in the same period last year. The bank also concluded a 5-year senior unsecured bond issuance of $600 million under the EMTN programme. The order book was oversubscribed three times demonstrating the strong investor appetite for UNB credit."
Commenting on the results, Mohammad Nasr Abdeen, chief executive officer, Union National Bank, said: "In the third quarter, the Group recorded balance sheet growth across all key business segments as the Group pursues its prudent strategy of growing its business in a sustainable and selective manner.
He further commented "The Group's focus remains to manage its cost structure efficiently and continue to invest in future growth areas and technology upgrades to enhance the overall customer experience." The operating profit for the nine month period was Dh1.781 billion, down by 15 per cent over the same period of prior year.
The operating income was lower by 10 per cent to Dh2.582 billion compared to the corresponding period of previous year. Both operating income and operating profit were negatively impacted mainly due to higher cost of term deposits at the back of tighter liquidity conditions in the market.
The net interest income dropped by 14 per cent to Dh1.926 billion for the nine month period ended 30 September 2016 on year on year basis, due to the drop in net interest margins by 47 bps to 2.64 per cent on account of higher costs of deposits as also the elevated delinquencies witnessed in the SME portfolio.
In order to further diversify its funding base, the bank successfully concluded issuance for $600 million of 5-year senior unsecured bonds under its Euro Medium Term Note programme. The issuance received a strong demand from international, regional and local investors. The bank has been complying consistently with the regulatory requirement of Eligible Liquid Assets ratio which came into effect from the second half of last year.
- haseeb@khaleejtimes.com