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Abu Dhabi’s UNB Q2 net profit rises 23 pct; beats forecasts
UNB's Q2 net profit 415.3 mln dirhams vs 337.4 mln dirhams; Impairments in Q2 151.0 mln dirhams vs 124.6 mln; Results beat average analysts forecasts
July 31, 2011 3:55 by Reuters
Union National Bank , jointly owned by the governments of Abu Dhabi and Dubai, posted a 23-percent rise in second-quarter net profit, beating analysts forecasts, as higher impairment losses were offset by a surge in net interest income.
The Abu Dhabi-headquartered lender earned a net profit of 415.3 million dirhams ($113.35 million) in the second quarter, compared with 337.38 million in the same period one year earlier.
Analysts polled by Reuters forecasted an average profit of 388.83 million dirhams in the second quarter.
Impairment losses in the second quarter were 151.0 million dirhams compared with 124.60 million dirhams in the year ago period, UNB said in a bourse statement on Sunday.
Net interest income surged to 512 million dirhams for the quarter versus 395.6 million dirhams a year earlier, the company said, attributing the increase mainly to a rise in loan growth.
Loans and advances rose 5.1 percent to 56.2 billion dirhams as at June 30, UNB said. UAE banks have struggled to increase lending despite a rise in overall liquidity in the banking system.
Last week, Emirates NBD , UAE’s largest lender by assets slashed its loan growth target for the year even as it saw a positive outlook for the economy.
In June, brokerage firm AlembicHC raised its price target on the company to 4.5 dirhams from 3.5 dirhams, citing higher net interest margins expectations. (Reporting by Stanley Carvalho, Editing by Dinesh Nair)