Union National Bank reports Dh495m profit for first quarter of 2013

Abu Dhabi: Union National Bank (UNB), reported Dh495 million in profit for the first quarter of 2013, up from Dh475 million during the same period in 2012, a 4.2 per cent increase.

Wadah Al Taha, chief analyst and economist at Zarouni Group, told Gulf News: “The share of UNB has increased on Wednesday by 3.8 per cent, 15 fils, closing at Dh4.08 which is one of the top advances in the market.”

During the first quarter the contribution of Islamic banking to the total revenues increased substantially.

“Revenues from Islamic banking increased. The contribution of Islamic banking increased from Dh99.44 million in the first quarter of 2012 to Dh142.7 million in the first quarter of 2013, a 43.5 per cent increase,” said Al Taha.

The bank attributed the increase in revenue to increase to net interest income and income from Islamic financing which increased by 3.9 per cent to Dh642 million in the first quarter of 2013 compared to Dh618 million for the same period of 2012, and an increase in non-interest income which rose by 7.7 per cent to Dh176 million in the first quarter of 2013 compared to Dh163 million for the same period in 2012.

He added that this has led to the increase in the total operating revenues to rise in the first quarter of 2013.

Total assets also increased from Dh86.068 billion end of March 2012 to Dh90.823 billion for the same period in 2013, recording a 5.5 per cent increase, said Wadah Al Taha,

He added that what is impressive is that the loans and advances increased by 1.5 per cent to reach at Dh58.2 billion end of March 2013 compared Dh57.3 billion for the same period in 2012 with a marginal increase of 0.2 per cent year on year.

Strong liquidity

“Deposits had hiked significantly to Dh67.8 billion end of March 2013 compared to Dh63.4 billion for the same period of 2012 which led to strong liquidity position with loan to deposit ratio of 85.9 per cent,” said Al Taha.

Mohammad Nasr Abdeen, CEO of the UNB, said “The first quarter of 2013 was satisfactory with consistent growth being witnessed across the key business segments. It was especially commendable that UNB had from its own funds fully repaid the Tier 2 subordinated loan to the ministry of finance of Dh3.2 billion, of which Dh1.5 billion was repaid in the first quarter of 2013, much ahead of its scheduled repayment in December 2016 whilst maintaining financial solidity and strong capitalisation levels and liquidity position”.

The bank said in a statement that both the operating income and operating profit registered consistent increases compared to the prior period, which reflects “sustainability of the business model being followed by the bank to grow its franchise and business in a measured and prudent manner”.

The bank added that the operating profit for the first quarter of 2013 was Dh628 million compared to Dh597 for the same period of 2012, an increase of 5.2 per cent.

According to the statement, the operating income for the first quarter of 2013 was Dh818 million compared to Dh782 million for the same period in 2012, up by 4.7 per cent.

Full repayment

UNB said on Wednesday that it had fully repaid an outstanding Dh1.7 billion ($462.8 million) loan to the United Arab Emirates’ ministry of finance. Under the original terms, the loan was due for repayment by the end of 2016, UNB said in a filing on Abu Dhabi’s stock exchange. The bank repaid Dh1.5 billion in the first quarter of 2013. With these payments, the bank has fully settled the subordinated loans of Dh3.2 billion which it received from the ministry in 2009, it said.