ABU DHABI: The banking sector is expected to grow around five to 10 per cent this year amid signs of steady economic growth this year, according to the chief executive officer of Union National Bank (UNB).

“The growth this year will be slightly better than last year and we expect the banking sector to improve between five to ten per cent depending on the stability of the financial position. There will be a steady growth in the UAE economy,” Mohammad Nasr Abdeen told reporters late on Wednesday following the bank’s annual general meeting.

The comments come as the UAE economy minister Sultan Bin Saeed Al Mansoori, expressed optimism about the growth of the economy this year boosted by higher oil prices.

Al Mansoori said earlier this week that the UAE economy is expected to grow between 3.5 per cent and 4 per cent depending on the stability in the region and political scene globally.

Oil prices rose by more than 10 per cent following the accord between Opec and non-Opec members at the end of last year to cut production by about 1.8 million barrels per day that is expected to positively impact economies in the Gulf region.

No plan for bonds

Speaking about raising money through bonds, Abdeen said the bank has no such plans currently due to the good liquidity situation but would consider if there is a need.

“We don’t have clear plans if we are going to raise bonds again but the latest one which we raised was very successful one. We achieved about Dh600 million and it’s covered more than three times and most important is that it covered from different banks from all over the world. This indicates how the financial institutions from across the world trust our bank and prefer to join us,” he said.

Expansion plans

Asked about the expansion plans of the bank, he said they are aggressively expanding in Egypt and are also converting their representative office in China to a branch in a month or two. He added that UNB will be the first bank from the UAE to have a branch in China. “If it is encouraging (in China) then we might open more branches according to the central bank regulations there.

“In Egypt we are expanding aggressively and we believe that we are in a good market. We have 42 branches and expect to add more branches. In Qatar and Kuwait, we have one branch each. Currently, we don’t have any plans to enter new markets and our focus is in the UAE,” Abdeen said.

The bank, which is 50 per cent owned by Abu Dhabi government, posted a 29 per cent rise in net profit for the fourth quarter in 2016. It reported a net profit of Dh251 million in the three months to December 31, compared to Dh195 million in the same period a year ago. However, full year net profit was down 15 per cent from Dh1.8 billion in 2015 to Dh1.57 billion last year.

The annual general meeting also approved a 20 per cent cash dividend for shareholders in 2016.

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CEO dismisses merger talks with ADCB

ABU DHABI: Union National Bank chief executive, Mohammad Nasr Abdeen, dismissed the talks of the bank merging with Abu Dhabi Commercial Bank (ADCB) as reported by some media. “It’s not true. No discussions at all with any of the responsible people or even with the major shareholders. This issue was not raised and are just rumours,” he said when asked whether he sees the possibility of a merger with ADCB.

Bloomberg reported last year, quoting sources, that Abu Dhabi is weighing a plan to merge Abu Dhabi Commercial Bank and Union National Bank as well combine Abu Dhabi Islamic Bank with Al-Hilal Bank. Abu Dhabi decided to combine its two largest banks National Bank of Abu Dhabi and First Gulf Bank in July to create a regional powerhouse with $175 billion (Dh643 billion) of assets.