Net profit up 5% Q-o-Q, ahead of estimates. UNB reported a net profit of AED470 mn (EPS: AED0.17) for 2Q16, -17% Y-o-Y and +5% Q-o-Q. UNB’s earnings came in ahead of our AED410 mn estimate (Bloomberg consensus AED386 mn) owing to i) lower-than-expected provisioning and ii) stronger-than-expected fee income.   Our view of the results:  UNB’s results were decent relative to our subdued expectations. The bank’s spreads improved marginally after shrinking sharply in 1Q16. Fee income improved as loan growth recovered Q-o-Q (+ 2.5% Q-o-Q in 2Q16 versus -0.1% Q-o-Q in 1Q16). Provisioning surprised positively as cost of risk came in at 63bps versus our expectations of 84bps. Credit quality metrics were broadly stable Q-o-Q with NPL ratio at 3.6% and NPL coverage at 102%.     Main positives: i) Loan growth recovers (+2.5% Q-o-Q); ii) Spreads widen (2.35% in 2Q16 versus 2.3% in 1Q16); iii) Lower-than-expected provisioning (cost of risk 63bps versus expectation of 84bps) (Company, Shabbir Malik, Murad Ansari)   Union National Bank: AED4.46 as of 16 July 2016, Rating: Neutral, FV: AED3.80 per share, MCap: USD3,344mn, UNB UH / UNB.AD