Mashreq posts AED1.7bn net profit in nine months

Dubai / Emirates Business

Mashreq, one of the leading financial institutions in the UAE, on Monday reported its financial results for the first nine months ending September 30, 2017. The net profit for 9M 2017 stood at AED1.7 billion, a 12% increase YoY. The impairment allowance was down by 30% YoY, while operating expenses were lower by almost 2% on the back of effective cost management. Mashreq’s best-in-class non-interest income to operating income ratio remained high at 39.8%, and investment income rose by 73.8% YoY.
The total assets remained stable at AED 121.8 billion while loans and advances increased by 6% to reach AED 64.7 billion as compared to December 2016. Customer deposits remained steady year to date at AED 76.1 billion, and loan-to-deposit ratio remained robust at 85.0% at the end of September 2017. Mashreq’s CEO, HE AbdulAziz Al Ghurair, said: “It has been a period of muted growth for the UAE banking system with the banking sector Gross Credit growing by only 0.3% as of August 2017. However at Mashreq we have been successful in increasing our loan book by 6% year to date. With a focus on cost management that has seen us reduce operating expenses by 1.7% year on year and a strong 30% decline in credit costs, I am delighted to report a 12% year on year increase in Net profits for the first 9 months of the year. Our strong liquidity and capital position has us well placed to capitalize on future growth opportunities.”
The liquid assets to total assets stood at 26.7% with cash and due from banks at AED 32.5 billion as on September 2017. The capital adequacy ratio and tier 1 capital ratio continue to be significantly higher than the regulatory limit and stood at 18.0% and 17.1% respectively.
Non-performing loans to gross loans ratio increased slightly to 3.7% at the end of September 2017. Total provisions for loans and advances reached AED 3.8 billion, constituting 134.4% coverage for non-performing loans. “In the future, banking will go digital and that is why we are investing significantly to develop new capabilities and evolve new business models. Mashreq Neo, a full service digital bank, is a recent example of our response to the fast evolving needs of today’s consumers,” Al Ghurair added.