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Union National Bank
Q2 Profit Drops 36pc 


ABU DHABI - The net profit of Union National Bank, or UNB, dropped by 35.66 per cent in second quarter of the year to Dh272.85 million from Dh424 million in the first quarter, due to higher impairment charges.

However, the drop in the net profit was less steep at Dh575.3 million, 24.8 per cent in the first half of the year.

Abu Dhabi-based Bank posted an operating income of Dh1.016.1 billion for the six month period ended 30 June 2009, reflecting a marginal decline of three per cent compared to corresponding period.

According to its balance sheet UNB took provisions of Dh84.49 million in the second quarter against Dh13.686 million in the first three months 
of the year. The Group’s income from core activities reflected by a growth of 19.2 per cent in the net interest income in the first half of 2009.

The loans and advances grew to Dh49.5 billion as at 30 June 2009 against Dh47.3 billion, an increase of 4.7 per cent year-on-year.

However, there was a nominal decline in the loans and advances as at 30 June 2009, due to the tough market conditions and slow down in the economy.

The customers’ deposits expanded by 7.3 per cent to Dh 51.2 billion at the end of first half of the year up against Dh47.7 billion, with the credit deposit ratio at 96.8 per cent.

The consolidated total assets expanded to Dh71 billion at the end of first six months period against Dh64.7 billion, showing a growth of 9.7 per cent.

The attributable return on average equity for the first half of 2009 was 14.9 per cent with the return on average assets being 1.7 per cent.

The Group maintains a close vigil on the costs whilst ensuring to invest and build the infrastructure to support growth in the medium term once market conditions improve. The efficiency ratio or cost to income for the first half of 2009 was 31.3 per cent.

The Bank has exercised the option to convert the Ministry of Finance deposits to subordinated Tier 2 capital which would bolster the capital adequacy position to exceed 22 per cent, once the necessary formalities for conversion are completed.

Following the issuance of Tier 1 Capital Notes to the Government of Abu Dhabi in the first quarter of 2009, the capital adequacy position has improved significantly with the overall capital adequacy ratio being 16.9 per cent up from 11.8 per cent comprising mainly of Tier 1 regulatory capital base.


haseebhaider@khaleejtimes.com