Mashreq’s profit up 5% as impairments drop

dubai — Mashreq bank on Sunday said its 9-month net profits grew 5 per cent to Dh1.7 billion on the back of higher operating income and drop in impairment allowance.

Total operating income was Dh4.6 billion compared to Dh4.4 billion, a year-on-year increase of 3.6 per cent. Net interest income and income from Islamic financing increased by 4.5 per cent and stands at Dh2.8 billion.The Dubailisted lender’s 9-month operating expenses increased 10.9 per cent year-on-year to Dh1.9 billion.

“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 Ghurair, chief executive officer, Mashreq.

“We remain committed to investing in state-of-the-art technology including robotics, artificial intelligence and machine learning. We have already accomplished several major milestones in transforming both our front and back-end processes, and will continue to showcase our agility and our thirst for disruption in our goal to be the region’s preferred banking partner,” added Al Ghurair. Assets increased 9.8 per cent to reach Dh137.4 billion by September 2018, compared to Dh125.2 billion at the end of 2017. Loans and advances increased 10.6 per cent to Dh69.4 billion, driven by 7.7 per cent growth in conventional finance.Non-performing loans stood at Dh2.6 billion in September 2018. Net allowances for impairment were Dh838 million compared to Dh916 million. Total provisions for loans and advances reached Dh4.3 billion, constituting 183.4 per cent coverage for NPLs as of September 2018.

Customer deposits increased by 8.1 per cent year-to-date to Dh82.2 billion due to an increase in both conventional deposits and Islamic deposits. Loan-to-deposit ratio stood at 84.3 per cent in September 2018 versus 82.5 per cent in December 2017.

Capital adequacy ratio as per Basel III remain strong and stood at 16.9 per cent as of September 2018 as against regulatory minimum of 12.375 per cent for 2018. Net profit for the third-quarter 2018 amounted to Dh587 million compared to Dh561 million in Q3 2017, an increase of 4.6 per cent.

During 3Q 2018, new projects worth Dh43.5 billion were financed during 2018 and these projects will enhance the region’s strategic reserves, support their infrastructure development and diversify the economy along with enrichment of the cultural outlook.

We achieved solid growth in our balance sheet with a deposit growth of 8.1 per cent year-to-date, well above market norms

Abdul Aziz Al Ghurair, CEO, Mashreq bank