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Key Highlights
UNB Group profit of AED 615 million for Q1-2015, up by 41% quarter-on-quarter
Operating profit for Q1-2015 of AED 684 million, up by 22% compared to same period of prior year
Loans and advances of AED 66.9 billion as at 31 March 2015, up by 8% year-on-year and by 4% over prior year end
Total assets of AED 97.8 billion as at 31 March 2015, up by 9% year-on-year and by 5% over prior year end
Customers' deposits of AED 69.7 billion as at 31 March 2015, up by 4% year on year and by 3% over prior year end
Sound liquidity position with loan to deposit ratio of 96.0% and advances to stable resources of well below 100% as at 31 March 2015
Cost to income ratio for Q1-2015 of 26.8%, consistently amongst the best in the UAE banking sector
Asset quality consistently improving with NPLs to gross loans of 3.6% and loan loss coverage of 99.2% as at 31 March 2015
Strong Overall and Tier 1 capital adequacy ratios of 18.7% and 17.6 % respectively as at 31 March 2015
Financial Review
Union National Bank (UNB), one of the leading banks based in the United Arab Emirates, recorded a strong increase in profit to AED 615 million for the first quarter of 2015 (Q1- 2014: AED 512 million), up by 20% year-on-year and by 41% over the preceding quarter.
Commenting on the results, Mr. Mohammad Nasr Abdeen, Chief Executive Officer, Union National Bank said "The UNB Group witnessed all round improvement in its various business lines which led to the Group posting a record quarterly profit. The Group has consistently been investing in its infrastructure, distribution network and business enhancing initiatives, which has ensured that the Group's performance continues to remain strong." He further commented "Along with the strong financial performance in the first quarter, it is pleasing to note the continuing improvement in asset quality metrics with loan loss coverage being close to 100%."
The operating income and operating profit both registered robust increase compared to the prior period driven by the solid growth in business activities. The operating profit for the first quarter of the year was AED 684 million, an increase of 22% over the same period of prior year. The operating income for the three month period ended 31 March 2015 was up by 19% to AED 935 million compared to the corresponding period of previous year driven by a strong growth in both net interest income and non-interest income.
The increase in net interest income was driven by the growth in the loan book and improvement in the net interest margin, which increased by 33 bps to 3.13% in Q1-2015 over the corresponding period of 2014 (Q1-2014: 2.80%). The increase in the net interest margin was due to an improvement in the asset mix and an active balance sheet management. The increase in non-interest income for the quarter was principally due to an increase in fees and commission income and trading revenues.
Balance sheet
The loans and advances were AED 66.9 billion as at 31 March 2015, up 8% year-on-year and 4% compared to the previous year-end at the back of growth mainly in the corporate loan portfolio. The investment portfolio of the Group increased significantly by 50% year-on-year to AED 14.4 billion as at 31 March 2015 and was up by 24% in comparison to prior year end. The total assets of the Group registered healthy growth to AED 97.8 billion as at 31 March 2015, an increase of 9% over that of 31 March 2014.
Customers' deposits were AED 69.7 billion as at 31 March 2015, registering an increase of 4% compared to the corresponding period in the previous year and up by 3% in the first quarter of 2015. The Group's liquidity position remains comfortable with the liquid assets, including investments constituting 27.0% of the total assets as at 31 March 2015 (31 March 2014: 26.8%). The loan to deposit ratio was 96.0% as at 31 March 2015 (31 December 2014: 95.1%) and the advances to stable resources ratio remained comfortable at 88%, well within the regulatory requirements.
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Press Release 2015
