Mid-sized banks post profits in positive sign for economy

Profits at the UAE's mid-size lenders increased during the first quarter in a sign of health in the domestic economy.

United Arab Bank reported net profits of Dh120 million (US$32.6m) for the first quarter, an increase of 60 per cent compared with the corresponding period a year earlier.

The bank's aggressive branch expansions in Abu Dhabi and the northern emirates had helped it attract new customers, said Paul Trowbridge, UAB's chief executive.

"Growth has been well-supported through our expanding branch network and improved product offerings," he said. "We are now a truly local bank where almost half of our new customers are Emiratis."

The bank's loan book increased 8 per cent during the quarter to Dh11.7 billion, with deposits rising 11 per cent during the same period to Dh11.2bn, narrowing the bank's gap between loans and deposits.

Union National Bank, which is jointly owned by the governments of Dubai and Abu Dhabi, reported an increase in net profits of 4.3 per cent to Dh491.5m on the back of sharply higher income from Islamic financing.

The bank also said it had repaid Dh1.5bn in crisis-era funding support from the Ministry of Finance during the first quarter, repaying in full the Dh3.2bn facility.

The bank's strengthening position had allowed it to repay the Tier 2 capital in full ahead of the December 2016 deadline, said Mohammed Nasr Abdeen, UNB's chief executive.

"The first-quarter results were satisfactory, with consistent growth being witnessed across the key business segments," he said in a statement.

But Invest Bank, one of the UAE's smallest financial firms, reported a 3.4 per cent slide in net profits for the quarter compared with a year earlier, squeezed by a fall in its net interest margin.