Net profit down 15% Y-o-Y, meets estimates. UNB reported a net profit of AED407mn for 3Q16, down 13% Q-o-Q and 15% Y-o-Y. The bank’s earnings were in-line with our estimate of AED420mn and consensus estimate of AED419mn. Our view of the results:  UNB’s results were mixed. Earnings came in line with our estimate as stronger-than-expected revenue (underpinned by recurring and non-recurring factors) was offset by higher provisioning. Revenue trend was encouraging and was driven by wider spreads (+3bps Q-o-Q to 2.38%), strong loan growth (+5% Q-o-Q) and healthy non-interest income.  UNB’s spreads have now widened for two consecutive quarters after bottoming out in 1Q16. Non-interest income was stronger-than-expected on the back of strong FX and investment income. Provisioning was the key negative surprise for us with the cost of risk rising to  113bps from 63bps in 2Q16 as the NPL ratio deteriorated Q-o-Q.     Main Positives: Strong loan growth (+5% Q-o-Q, +7% Y-o-Y), Slight improvement in spreads (+3bps Q-o-Q to 2.38%). Main Negatives: Increase in provisioning ( cost of risk rose to 113bps from 63bps in 2Q16); Higher-than-expected operating costs; Tighter balance sheet liquidity (LDR increased to 98% from 96%). (Company, Shabbir Malik, Murad Ansari)   UNB: AED4.00 as of 17 October 2016, Rating: Neutral, FV: AED5.00 per share, MCap: USD2,999mn, UNB UH / UNB.AD