Union National Bank Egypt (UNB Egypt) aims to achieve 30% growth in loans and deposits, as well as 45-50% earnings growth in 2017, according to the bank’s Vice Chairperson and parent company’s CEO, Mohamed Nasr Abdeen. Abdeen said the bank intends to implement an expansion plan in Egypt in the coming period, considering the importance of the market to the group. The bank’s strategy is targeting a market share of 5% of the Egyptian banking sector over the next 10 years, supported by geographical expansion in branches and ATMs, as well as modern IT systems. Abdeen added that the bank is also aiming at providing all means of logistical support to the Suez Canal Economic Zone (SCZone), being one of the most promising areas in Egypt, along with financing SMEs (currently 10% of the loan book) and continuous training to improve staff efficiency. UNB Egypt reported net profit of EGP181mn in 2016, up 13% Y-o-Y from EGP160mn in 2015. Abdeen further stated that the bank was hit by EGP100mn loss related to EGP floatation; earnings should have been at EGP300mn in 2016 excluding this negative impact. The bank’s capital adequacy fell to 11.3% post EGP devaluation; Abdeen said UNB Egypt had asked for USD50mn loan from its UAE parent company over five years, including a one-year grace period, to shore up its Tier 2 capital. UNB Egypt’s loan portfolio reached EGP8.6bn in 2016, up 52% Y-o-Y and has a network of 43 branches and is planning to open five more in 2017. Customer deposits reached EGP21bn in 2016, up 98% Y-o-Y, of which EGP3.8bn are retail deposits (up 18% Y-o-Y), while corporate deposits reached EGP17bn (up 135% Y-o-Y) in 2016. 

Union Natl. Bank (AD): AED4.34 as of 21 Mar. 2017, Rating: Neutral, TP: AED4.80/share, MCap: USD3,253mn, UNB UH/UNB.AD