UNB misses analyst estimates
(MENAFN- The Arabian Post) Union National Bank reported third-quarter profit that missed analyst estimates as impairment charges rose and fee and trading income declined.
Net income fell 12 percent to 480.6 million dirhams ($131 million), the Abu Dhabi-based bank said in a statement to the stock exchange on Sunday. Impairment charges jumped 57 percent to 199.8 million dirhams. Fee and commission income dropped 16 percent and the lender had a loss from currency and derivatives trading in the quarter versus a profit a year ago.
The increase in impairment charge is "due to higher provisions in the commercial business and increased provision coverage on the portfolio," UNB said in a separate statement
A near halving of oil prices over the past year is beginning to hurt growth in the U.A.E., the second-biggest Arab economy after Saudi Arabia, and may be leading to a rise in loan defaults. United Arab Bank PJSC, another U.A.E. lender, earlier this month reported a 272.6 million-dirham loss in the third quarter compared with a profit a year ago due to provisions made after an increase in loan defaults in "higher risk" commercial loans.
Commercial Bank International PSC also reported on Sunday a 28.6 million-dirham loss compared with 64.9 million-dirham profit a year ago. Impairment losses and provisions climbed 63 percent to 115.1 million dirhams.
Union National Bank's loans grew 7 percent from a year ago to 69 billion dirhams and deposits surged 17 percent to 73.2 billion dirhams, according to the statement. Both Abu Dhabi and Dubai governments hold stakes in UNB.
Net income fell 12 percent to 480.6 million dirhams ($131 million), the Abu Dhabi-based bank said in a statement to the stock exchange on Sunday. Impairment charges jumped 57 percent to 199.8 million dirhams. Fee and commission income dropped 16 percent and the lender had a loss from currency and derivatives trading in the quarter versus a profit a year ago.
The increase in impairment charge is "due to higher provisions in the commercial business and increased provision coverage on the portfolio," UNB said in a separate statement
A near halving of oil prices over the past year is beginning to hurt growth in the U.A.E., the second-biggest Arab economy after Saudi Arabia, and may be leading to a rise in loan defaults. United Arab Bank PJSC, another U.A.E. lender, earlier this month reported a 272.6 million-dirham loss in the third quarter compared with a profit a year ago due to provisions made after an increase in loan defaults in "higher risk" commercial loans.
Commercial Bank International PSC also reported on Sunday a 28.6 million-dirham loss compared with 64.9 million-dirham profit a year ago. Impairment losses and provisions climbed 63 percent to 115.1 million dirhams.
Union National Bank's loans grew 7 percent from a year ago to 69 billion dirhams and deposits surged 17 percent to 73.2 billion dirhams, according to the statement. Both Abu Dhabi and Dubai governments hold stakes in UNB.
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