Opinions divided over rally by UAE lenders

The jury is out on whether the UAE's banks can sustain their recent rally as significant uncertainty clouds the sector, but Union National Bank (UNB) seems better positioned than some rivals.

Goldman Sachs and Global Investment House yesterday issued research notes with opposing views of the UAE's banking system. Global gave a thumbs up, Goldman a thumbs down, citing the impact on profits because of Central Bank rules on personal loans. Among the top five UAE banks, UNBderives the lowest proportion of fees from retail loans, according to Global. That limits the extent of a dip in profitability from the Central Bank's recent broadside on retail lending.

Analysts set a lower price target of Dh4.70 per share but maintained their"strong buy" recommendation, saying the stock had plenty of room to grow.