Union National Bank announces results for the nine month period ended 30 September 2009

The operating profit for the same period was Dhs1,090.5m. The results for nine months period ended 30 September 2009 were impacted due to the fair value loss on investment properties as against a fair value gain in the corresponding period last year. After adjusting for the fair value changes on the investment properties, the operating profit from the core activities registered an increase of 1.4% for the nine months period ended 30 September 2009 as compared to the prior period.

Mr. Mohammed Nasr Abdeen, Chief Executive Officer, Union National Bank commenting on the results said

"The stable operating profit from the core business is a reaffirmation of the soundness of the UNB Group's strategy and business model to grow its business in a measured and controlled manner. The conservative approach followed by the Group has ensured that the Group was well positioned to face the challenging economic environment with limited impact on its underlying businesses and profit from core activities"

The loans and advances as at 30 September 2009 was Dhs50.7bn, an increase of 0.6% over the figure as at the year-end, reversing the trend of a marginal decline witnessed in the first half of 2009. In line with the strategy to remain liquid, the Group has been building on its stable customers' deposits base. This has been reflected in an increase in customers' deposits by 24.6% to Dhs54.7bn as at 30 September 2009 compared to Dhs43.9bn as at 30 September 2008 with the loan to deposit ratio improving further to a comfortable 92.7% at 30 September 2009 from 96.8% at 30 June 2009 and 101.9% at 31 December 2008.

The consolidated total assets as at 30 September 2009 reached Dhs75.7bn an increase of 20.9% compared to Dhs62.6bn at 30 September 2008. The main drivers of this growth were an increase in liquid assets and non-trading investments.

The attributable return on average equity (annualized) for the nine months period ended 30 September 2009 was 15.7% with the return on average assets (annualized) being 1.8%. The ratio of non-performing loans to loans and advances was 1.3% at 30 September 2009 with the coverage ratio being 105.7%. These key performance metrics remain satisfactory amid the prolonged market uncertainties that have existed both globally and in the region.

The Group continues to closely monitor its operating expenses as is evident from the decrease in operating expenses in the third quarter of 2009 to Dhs164.3m which is lower as compared to that for the corresponding period for the last year and the second quarter of 2009. The cost to income ratio for the nine months period ended 30 September 2009 was 30.7%.

The overall capital adequacy position remained strong, with the related ratio being 17.1% as at 30 September 2009, comprising mainly of Tier 1 regulatory capital base. The capital adequacy ratio is set to exceed 22% on conversion of the Ministry of Finance deposits to Tier II qualifying loan, once the necessary formalities are completed.