(MENAFN- Khaleej Times) People walking past a Union National Bank branch in Dubai. The total assets of the UNB Group increased by seven per cent in 2014 to Dh93.5 billion as at December 31, 2014. - KT file photo
Union National Bank on Tuesday said its year-on-year earnings surged 16 per cent to Dh2.021 billion due to higher incomes from interest and Islamic finance.
The Abu Dhabi-based lender also showed robust performance in October-December 2014 quarter as the net profit climbed 42 per cent to Dh436 million. However, the earnings missed analysts' forecast. Four analysts polled by Reuters forecast an average profit of Dh442.7 million.
The loans and advances increased by seven per cent in 2014 to Dh64.1 billion as at December 31, 2014, with the loan growth being witnessed across various sectors; Customers' deposits recorded a growth of four per cent in 2014 to Dh67.4 billion as at December 31, 2014; the total assets of the UNB Group increased by seven per cent in 2014 to Dh93.5 billion as at December 31, 2014.
The non-interest income in 2014 increased 36 per cent to Dh831 million and was up by 90 per cent in fourth quarter of 2014 as compared to same quarter of prior year. The increase was principally driven by an increase in net fees and commission income which was up by 27 per cent in 2014 to reach Dh638 million partially offset by the lower gains on trading and non-trading financial instruments given market movements, the lender said in a regulatory filing to Abu Dhabi Securities Exchange.
Mohammad Nasr Abdeen, chief executive officer, Union National Bank, said the UNB Group surpassed a major profit milestone, with the group's profit for the full year exceeding Dh2 billion for the first time.
"The consistent growth in underlying business, focussed strategy and our deep commitment to all our stakeholders has ensured that the UNB Group continues to grow its business and franchise," he said.
The operating profit for the year ended December 31, 2014 was Dh2.546 billion, an increase of eight per cent compared to the previous year. The operating income for 2014 was Dh3.501 billion, nine per cent higher compared to 2013, the statement said.
The net interest income and net income from Islamic financing for 2014 was up by three per cent to Dh2.670 billion.
Due to competitive pricing pressures the net interest margin for 2014 fell slightly by eight basis points to 3.00 per cent, the impact of which was fully offset by an increase in interest earning assets.
The group also recognised fair value gain on investment properties in 2014 which further boosted the non-interest income.
The investment portfolio of the group increased significantly by 47 per cent to Dh11.6 billion as at December 31, 2014, and comprises of high quality fixed income issuances by regional and local issuers. General improvement in the business environment, prudent lending standards and ongoing recovery efforts has led to asset quality measures maintaining a positive trend.
The board of directors has recommended a dividend distribution of 25 per cent of cash dividend.
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