Dubai: Union National Bank (UNB) on Wednesday reported a net profit of Dh1.18 billion for the first half of 2015, up 15 per cent compared to Dh1 billion in the same period last year.
The bank’s net profit for the second quarter of 2015 was Dh571 million, up 10 per cent year on year compared to Dh520 million in the corresponding quarter of the last year.
“The UNB Group’s total assets crossed the Dh100 billion mark for the first time, a significant milestone. This growth in assets was the result of the focused efforts of the operating business segments to grow the business in a consistent manner,” said Mohammad Nasr Abdeen, CEO of UNB.
The operating income for the first six months of 2015 of Dh1.91billion was up 20 per cent year on year. Increase in net interest income and net income from Islamic financing, was up by 16 per cent in the first half of 2015 to Dh1.47 billion from Dh1.27 billion last year. This was driven by an increase in the asset book and improvement in interest margins.
The net interest margin improved by 30 basis points to 3.16 per cent as compared to the corresponding period of 2014. Net fee and commission income remained the main driver for the growth in non-interest income which was up by 36 per cent over the corresponding period last year.
The bank reported a 13 per cent growth in total assets to Dh103.8 billion year on year as at 30 June 2015 and up 11 per cent compared to the previous year end. UNB’s loans and advances were up 9 per cent year on year at the close of the first half of 2015 and up 5 per cent from year-end 2014.
The investment portfolio of the Group increased significantly by 42 per cent year-on-year to Dh15.6 billion as at 30 June 2015 and was up by 34 per cent in comparison to prior year end.
Customers’ deposits grew by 9 per cent year-on-year to Dh73.2 billion as at 30 June 2015, registering a similar increase of 9 per cent compared to the previous year end. The loan to deposit ratio was 92.3 per cent as at 30 June 2015.
Asset quality trend has shown consistent improvement with the ratio of non-performing loans and advances to gross loans and advances, improving by 40 bps to 3.4 per cent as at June 30, 2015. The loan loss coverage further improved to 107.5 per cent in the first half of this year against 97.2 per cent at year end 2014. The impairment charge on financial assets for the first half of 2015 was Dh186 million compared to Dh91 million in the same period last year. UNB’s capital adequacy ratio at the close of the first half of 2015 was at 18.8 per cent with the Tier I capital adequacy ratio of 17.6 per cent.
“The UNB Group continues to witness solid financial performance with consistently improving asset quality metrics with loan loss coverage increasing to above 100 per cent during the first half of the year,” said Abdeen.
