Mashreq posts Dh450M profit in Q1; assets rise
dubai — Mashreq, one of the leading banks in the UAE, reported on Thursday Dh450 million net profit for first quarter 2020 has reported its financial results for the first quarter ending March 31, 2020.
In a statement, the bank said operating income for the quarter stood at Dh1.5 billion, a slight decline compared to last year. While total assets grew by 2.0 per cent to Dh162.6 billion, loans and advances increased by 2.8 per cent to Dh78.3 billion as compared to December 2019 and customer deposits declined by 2.7 per cent to Dh88.5 billion as loanto-deposit ratio remained strong at 88.5 per cent, the bank said.
“Capital adequacy ratio and Tier 1 capital ratio continued to be higher than the regulatory limit of 15.9 per cent and 14.8 per cent respectively,” it said. Non-performing loans to gross loans ratio increased to 4.4 per cent in March 2020 compared to 3.6 per cent in December 2019 as total provisions for loans and advances reached Dh4.3 billion, constituting 101.4 per cent coverage for non-performing loans, said the lender.
Ahmed Abdelaal, group CEO at Mashreq Bank, said despite a tough operating environment, Mashreq continued its positive growth trajectory in the first quarter.
“We achieved a respectable Dh450 million in net profit for the first quarter despite strong headwinds like steep decline in interest rates and impact of the Covid-19 crisis. Our revenue has also remained stable with our loans and advances growing by almost three per cent in the first quarter of 2020.”
The bank’s best-in-class non-interest income to operating income ratio increased to 48.7 per cent, compared to 40.4 per cent over the same period last year. “Furthermore, we also continued to show robust liquidity with a liquid assets ratio of 31.8 per cent,” said Abdelaal.
“Given the unprecedented situation we are facing now, we invoked several management actions during the quarter, aimed at ensuring the safety and security of all our stakeholders as well as supporting their financial well-being. We constituted a task force with representation from all departments to monitor the Covid-19 situation and take proactive decisions to resolve any concerns,” said Abdelaal.
“As a result, today, 97 per cent of our workforce operate from home and continue to provide uninterrupted service to our customers, which is a testament to our robust business continuity planning measures,” he said.
In March, the bank also rolled out a substantial banking benefits package for all customers that have been impacted by the outbreak. The package, which extends to new and current Mashreq customers, will provide relief to employees and businesses, particularly in stressed sectors, through assistance such as reduced costs, loan deferrals, reduced interest rates and processing fees, said Abdelaal.
“We continue to monitor local developments that affect our offices around the world, and remain in communication with our customers, to ensure that they have the access they need to all channels including our digital and online channels,” the bank said.
We invoked several management actions during the quarter, aimed at ensuring the safety and security of all our stakeholders Ahmed Abdelaal, Group CEO, Mashreq Bank