Oct. 20 (Bloomberg) -- Union National Bank PJSC, in which the governments of Abu Dhabi and Dubai hold stakes, said third-quarter profit rose 28 percent on higher lending income.
Net income advanced to 459.6 million dirhams ($125 million), or 0.18 dirham a share, from 358 million dirhams, or 0.13 dirham, a year earlier, the bank said in a statement today. Investment bank Shuaa Capital PSC estimated third-quarter profit would be 417 million dirhams.
The “provision charges were lower than expected,” while the operating performance met our estimates, Shuaa analysts including Sofia El Boury said in an e-mailed statement. UNB’s shares should “outperform the market during the coming sessions on the back of these strong results,” Shuaa said.
Banks in the United Arab Emirates, the second-biggest Arab economy, are recovering after the global financial crisis weakened lending, crimped investment banking and spurred loan defaults. U.A.E. economic growth will probably improve to 3.2 percent in 2011 from 2.4 percent this year, according to estimates from the Washington-based International Monetary Fund.
UNB’s impairment losses on financial assets almost doubled to 59.8 billion dirhams, the company said.
While “uncertainties and challenges remain in the global economic environment, we remain optimistic about the sustainability of the expected economic recovery and our ability to capitalize on those opportunities,” Chief Executive Officer Mohammad Nasr Abdeen said in the statement.
The lender’s net interest income and income from Islamic financing climbed 27 percent in the quarter to 513.4 million dirhams, while fee and commission income rose 24 percent to 141.2 million dirhams. The lender’s loan book increased 7 percent at the end of September from December to 54.4 billion dirhams. Customer deposits gained 3 percent to 52.9 billion dirhams.
Union National Bank rose 2.6 percent to 3.59 dirhams at 12:38 p.m. in Abu Dhabi trading, boosting its gain this year to 24 percent.
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