The Abu Dhabi lender Union National Bank said its second-quarter net income declined by 17 per cent as the economic slowdown sparked by falling oil prices reduced the demand for loans.
Net profit fell to Dh472 million in the second quarter compared with Dh571m in the same period last year, the bank said yesterday. Net interest income also fell by 17 per cent to Dh636m versus Dh768m. Operating income fell 11 per cent to Dh868m versus Dh979m.
“Given the generally uncertain global economic outlook, the UNB Group maintained its strategy to selectively pursue growth focusing on good-quality assets while managing the downside risks,” said Mohammad Nasr Abdeen, the bank’s chief executive.
“The Group’s balance sheet continues to remain strong, coupled with adequate liquidity and capital buffers as the region continues to adjust to an environment of lower oil prices.”
The past year has been tough for banks with a few laying off employees because of a decline in business as deposits have dwindled and some customers, mostly small and medium-sized enterprises, have faced difficulty in paying back debt.
Amid the tightening economic conditions, National Bank of Abu Dhabi and FGB, the two biggest Abu Dhabi-based banks by assets, said earlier this month that they would merge in what, if approved by shareholders, will become the biggest bank by assets in the Middle East.
That may put pressure on smaller banks to join forces to compete.
More than 50 banks and financial institutions serve 9 million customers in the UAE, making it one of the most crowded banking markets in the region.
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