The Abu Dhabi lender Union National Bank (UNB) said its third-quarter profit fell by 15 per cent as the money it makes from loans and Islamic financing contracted amid continued pressure from small business delinquencies.
Net profit decreased to Dh409.6 million compared with Dh483.1m in the same period last year. Net interest income and net income from Islamic financing fell by 13 per cent to Dh667m from Dh770m. Net impairment charges on financial assets improved, however, by 4 per cent, dropping to Dh192m from Dh200m, despite the continuing problems small businesses face in repaying debt.
The bank’s profit in the third quarter missed expectations. Three analysts polled by Bloomberg had forecast a profit of Dh418.7m.
“The group’s focus remains to manage its cost structure efficiently and continue to invest in future growth areas and technology upgrades to enhance the overall customer experience,” said Mohammad Nasr Abdeen, the bank’s chief executive.
UAE banks have not been having the best of times since the price of oil began its long descent during the summer of 2014. Deposits have dwindled as government-related entities withdrew funds to help fill a growing budget deficit. Among the hardest hit businesses have been small and medium-sized ones that have struggled in the economic slowdown.
It was estimated by Abdul Aziz Al Ghurair, the head of the UAE Banks Federation, last November that small business owners may have left up to Dh5 billion in unpaid debts before fleeing the country.
mkassem@thenational.ae
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