Abu Dhabi: Union National Bank (UNB) does not expect to see much growth in financial performance or in lending in 2016 amid challenges in the regional and global macroeconomic environment, a top spokesman said.

“In 2016, you probably won’t find big jumps in the business or big jumps in profits … I think if banks manage to maintain their financial performance from 2015, that will be good but I think the banking sector will face challenges in seeing a higher growth rate this year compared to last year,” said Mohammad Abdeen, the bank’s chief executive officer.

Speaking to reporters after the bank’s annual general meeting, Abdeen said UNB may also tap the bond market in 2016, having only utilised $750 million so far of its $3 billion (Dh11 billion) bond programme.

“Of course, we can utilise [the bonds] at any time if we see that this is a better option for us, but the finance from our customer deposits is available and still cheaper, and most of the deposits we have are stable. We may think about [tapping the bond market] in case the assets increased substantially,” he said.

During the bank’s annual general meeting, shareholders approved the board of directors’ recommendation to distribute a cash dividend of 20 per cent. Industry experts have long held a view that the GCC’s banking sector will face increased pressure in 2016 on the back of lower oil prices, which have meant a tightening in liquidity at banks especially due to significantly reduced deposit inflows from governments and government-related entities.

Asked about liquidity, Abdeen said it was not an issue last year, with the bank seeing an increase in deposits of nearly 11 per cent.

As for loans, he said, “You don’t expect big jumps [in loans] because there’s a slowdown not only in the region but in the world as a whole.” The CEO pointed that the recent hike in interest rates from the US Federal Reserve will not be a factor in slowing down loans, however, as interest rates remain relatively low.

The Abu Dhabi-based bank saw a seven per cent increase in loans in 2015, with the figure likely to remain stable this year, Abdeen said.

In January, UNB reported Dh1.86 billion in net profit for 2015, marking an eight per cent drop from the Dh2.02 billion reported in 2014. In the fourth quarter of the year, however, the decline in profit was much larger, reaching 55 per cent as the bank reported Dh195 million in net profits for the quarter — down from Dh436 million in Q4 2014.

The CEO commented on the results in an earlier statement saying that global and regional economies saw “considerable headwinds” in 2015, with sharp market movements for various asset classes.

The bank is still planning to grow its presence, though, Abdeen said.

“In Egypt, we opened nine branches during the last quarter [of 2015], and we are adding three more branches during the first quarter of this year … In Asia, we are going to open the first branch in China, and we will be the first GCC bank to have a branch in China,” he said.

UNB has already received approval to operate in China, and is expected to open its first branch in the country in Shanghai before June this year.