Union National Bank PJSC, in which the governments of both Abu Dhabi and Dubai hold stakes, posted a 23 percent jump in second-quarter profit, beating analysts' estimates, as the lender benefited from higher interest income.
Net income rose to 415.3 million dirhams ($113 million), or 17 fils a share, from 337.4 million dirhams, or 14 fils, a year earlier, the Abu Dhabi-based bank said in an e-mailed statement today. The median estimate of four analysts was for a profit of 396 million dirhams, according to data compiled by Bloomberg.
UAE banks are recovering from the global credit crisis, which slowed lending, hurt investment banking and led to a rise in loan defaults. The UAE economy, the Arab world's second biggest after Saudi Arabia, will expand 4 percent this year from 3 percent in 2010, according to Standard Chartered Plc.
The increase in net interest income was "driven both by a growth in the loan book and an expansion in the net interest margin," Union National said in the statement. "Overall liquidity in the local banking system continues to improve."
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Net interest income and income from Islamic financing rose 27 percent from a year earlier to 595.5 million dirhams, the bank said. Impairment charges on financial assets, including for bad loans, increased 21 percent to 151 million dirhams, while the ratio of non-performing loans to gross loans rose to 1.5 percent at the end of June from 1.4 percent in March.
The shares jumped 3.9 percent, the most in two months, to 3.5 dirhams at 10:19 a.m. in Abu Dhabi.