While Union National Bank (UNB) succeeded in beating analysts consensus estimates by 8 per cent, with net profits rising by 9.7 per cent to Dh455.7m, in the second quarter, there has been some concern about the deterioration in its asset quality.
Notwithstanding this, the share price of Union National Bank has risen more than 10 per cent in 2012, though one year (52 week) return has only been 1.72 per cent until last week. But, analysts are positive about the outlook for the stock.
But first the concerns. Non-performing loans (NPLs) increased by around 18% in the second quarter, while loans decreased marginally (1.4%) resulting in nearly flat year to date growth. And both these indicators aren’t likely to get better in the remaining quarters of the year.
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