UNB established in 1982 with 50% owned by Abu Dhabi Investment Council, 10% owned by Dubai Government, few other Semi-gov shareholders from other emirates but not expicilty disclosed as they are below 5% limit. My estimate for the shares held by the non-gov shareholders are less than 30% of the 2500m share
I can only find performance data starting 2006,The bank has been performing very well Profits grew from 1100m to 1500m over the past 5 year. The bank seems to be conservative..it grows slowly but surely. No sudden growths also no bad surprises over the past "challenging" 5 yrs. The provisions for bad debt did not grow that much during 2008, 2009, 2010, although 4Q 2011 witnessed Dhs 300m provision which was mainly related to one of the Dubai semi-gov groups.
Also conservative in dividend cash payments, it keeps most of the profit re-invested in the pand and they would pay on 25% to 35% in cash. Yet that small percentage is still very good. UNB paid 35 Fils on 2006, 20 fils on 2007, 10 Fils on 2008, no cash for 2009, 10 Fils for 2010, and soon it will pay 15Fils for 2011. It has also paid share dividend of 10% most of these years
Over the past 6 yrs the lowest Profit per share has been around 46 Fils in 2009 while the highest is 60 Fils this year. The current P/E ratio is a great 5.3 , which makes UNB share the cheapest bank in UAE (average P/E 7.
and the GCC (average above 9). In fact at P/E 5.3 UNB may be the cheapest stock in UAE
The book value of the bank is Dhs 4.38 while it te stock is trading at 3.1, so the Price/Book value (P/Bv) is 70%, makes it again the cheapest bank share price in UAE with most active commercial banks trading close just above book value (except for Emirates Bank which is 50% of Bv). GCC banks trade 30-80% higher than book value. Book value of the banks has been proven to be the only accurate books without hidden bombs and surprises... all the banks, not just UNB (thanks to Central Bank)
Trading Volumes and Investors
The main problem with the share price is the very limited trading on banking sector in general, and this bank in specific. Again very similar to Emirates Bank.. Most banks shares are non-Shariaa compliant so most moselms prefer not to trade in these shares.. As for the "non-islamic" mutual funds they would avoid trading in stocks which are not liquid as the need to deal with larger investment that would need to be invested or liquidated on short notice as investors deposit or cash out from the fund. That would leave the very limited trading mainly within the hands of smaller non-shariaa investors.
Most valuation reports put this bank on the top spot for gains potentials... Best in the whole GCC for expected gains based on Fair Value estimated between 3.9 and 5.8.
I would expect the bank's 2012 profit to increase next year to 70 Fils as the extra provision of 4Q does not repeat, Hence the bank would be in a good position to pay 25 Fils in cash dividend (nice 8% cash return)...Which would be still 35% of the profit compared with 50% average in GCC ( look at FGB, DIB, ENBD they have pall paid higher % in cash)
This share is more for investment rather than for swing trading , impossible for day trading...
The bank is now making much more profits than 2007 and 2008 UAE boom years, while most other shares listed are hardly making half the profits of 2007/2008 (Emaar, Aldar, DIC, Tamweel, Tabreed, ...etc)..So why this share is not bouncing back?
Is it forgotten and kept by the BB to make a final kill ? or Is it hiding some black secret ?