Dubai: Union National Bank (UNB) Wednesday beat expectations with a net profit of Dh380.3 million for the first quarter of 2010, an increase of 25.1 per cent from Dh303.9 million in the same quarter last year.
"The results are quite satisfactory considering the prevailing macro-economic conditions, general risk aversion that persists and the continuing pressure on asset quality at industry-wide level which remains at an elevated level," a bank spokesman said.
"The increase in profit was driven by careful liability management and ensuring that optimal levels of liquidity are maintained whilst continuing to focus on building the core lines of business."
Loans and advances increased 2.9 per cent to Dh50.6 billion as on March 31 compared to Dh49.2 billion in the first quarter of last year.
Compared to the previous year end there was a marginal decline in loans and advances.
The bank attributed the decline in lending activities to the muted credit environment.
"Earnings in first quarter 2010 beat our estimates by 40 per cent and street estimates by 25 per cent helped by margin expansion, strong fee income, and lower loan loss provisioning," said HC Brokerage analyst Janany Vamadeva.
"UNB continues to follow a cautious approach in credit expansion as reflected in its flat loan book, which is lower than its Abu Dhabi peers."
The bank's operating income for the first quarter rose 29.7 per cent to Dh643.5 million from Dh496.0 million in the same period last year.
The net interest income increased 25.2 per cent to Dh477.3 million.
Non-interest income increased 44.7 per cent to Dh166.2 million in the first quarter of this year from Dh114.9 million in the same period last year.
Deposits dropped 10.8 per cent to Dh48.1 billion from Dh53.9 billion at the close of last year.
