High liquid assets fuel Mashreq profit

Bank’s focus on technology and innovation sees rise in profits, incomes

Mashreq reported a Dh1.7 billion net profit for the first nine months of 2018, up 5 per cent compared to Dh1.6 billion reported in the same period last year.

For the third quarter of 2018, the bank reported Dh587 million net profits, compared to Dh563 million reported in the second quarter of this year and Dh561 million in the third quarter of last year.

“With a firm focus on fostering innovation in each aspect of our business, Mashreq’s third quarter results are testament to the continuing success of our transformation. We achieved solid growth in our balance sheet with a deposit growth of 8.1 per cent year-to-date, well above market norms. This was complemented by our strong liquidity position with high liquid assets to total assets ratio of 28.4 per cent,” said Abdul Aziz Al Gurair, Mashreq’s CEO.

Total operating income for the nine-month period ended September 30, 2018 was Dh4.6 billion, up 3.6 per cent compared to Dh4.4 billion reported in the same period last year. Insurance, forex and other income contributed to Dh230 million of the increase; revenue from net interest income and income from Islamic financing also saw an increase of Dh120 million year on year.

Net interest income and income from Islamic financing increased by 4.5 per cent year on year and stands at Dh2.8 billion.

Total non-interest income increased by 2.2 per cent — the decline in fee, commission and investment income was compensated by a 47.6 per cent increase in forex, insurance and other income. Net fee and commission income represented 58.9 per cent of total non-interest income in the nine-month period in 2018 compared to 66.7 per cent in the same period last year.

Investing in innovation

Operating expenses for the first nine months of 2018 increased by 10.9 per cent yearon-year to reach Dh1.9 billion. Efficiency ratio at 42.4 per cent at the close of the third quarter of 2018 increased with respect to the previous year’s 39.6 per cent in the same period in 2017, largely driven by increased investment in technology and branch transformation project.

“We remain committed to investing in state-of-the-art technology including robotics, artificial intelligence and machine learning, ensuring our customers benefit from a modern, simplified and intuitive banking experience,” said Al Gurair.

Non-performing loans stood at Dh2.6 billion. Net allowances for impairment for the nine-month period in 2018 was Dh838 million compared to Dh916 million in the same period last year.