Union National Bank (UNB) yesterday reported a drop of 10.1 per cent in its net profits for the first quarter of 2009 as it booked losses on investment properties and trading in financial instruments, but said it was satisfied with the result.
From around Dh337.9 million in the first quarter of 2008, the bank's net income declined to Dh303.9m in the first quarter of 2009.
The quarterly profit beat two analysts' forecasts in a Reuters net profit survey this month which expected profit to decline 21.4 per cent and 79.1 per cent.
UNB is the latest bank in Abu Dhabi to exceed analysts' forecasts as it continues to grow its lending business even as a collapse in oil prices and global financial turmoil dim growth prospects in the Gulf.
"The results are quite encouraging considering the extremely challenging operating environment and the difficult market conditions that continue to impact the global markets," the Abu Dhabi-based bank said in a statement.
Its balance sheet showed operating profits remained almost unchanged at Dh348.5m but total operating income edged up to Dh396m from Dh486.9m in the same period.
Net interest income surged to Dh381.1m from Dh282.4m but the bank reported a loss of Dh36m from its investment properties. Operating expenses also took a toll on net profits as they grew to around 147.4m in the first quarter of 2009 from Dh138.8m in the first quarter of 2008.
The government-administered UNB said its total assets swelled to about Dh72.2bn from Dh65.2bn to maintain its position as one of the largest banks in the UAE. Shareholders equity slightly rose to Dh7.62bn from Dh7.52bn.
The bank said interest income and income from Islamic financing surged 32.5 per cent to Dh977.09m.
UNB had missed analyst forecasts in the fourth quarter with a 70 per cent plunge in profit as it booked provisions for an expected rise in bad loans amid a real estate slump that has hit Dubai.
Abu Dhabi's First Gulf Bank and National Bank of Abu Dhabi have both beat analysts' forecasts with their first-quarter profits. (With inputs from Reuters)
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