Wednesday 12, April 2017 by Nabilah Annuar

Mashreq’s profits up three per cent in the first quarter

Mashreq has reported its financial results for the first quarter ending 31 March 2017.

Witnessing a stable growth, Mashreq’s net profit increased by 2.7 per cent year-on-year to AED 546 million primarily due to a 15 per cent decrease in impairment allowance. Net interest income and net income from Islamic products were down by 3.6 per cent year-on-year, on the back of flat loan growth.


Commenting on their performance, Mashreq CEO, Abdul Aziz Al Ghurair said, “Given the challenging business environment in 2016, Mashreq’s cautious stance has allowed us to stay focused on building quality assets whilst upholding a strong liquidity position, as evidenced by the bank’s healthy loan-to-deposit ratio of 80 per cent.”


The bank’s non-performing loans to gross loans ratio remained relatively steady at 3.3 per cent at the end of March 2017. The risk charge for the quarter decreased from AED 425 million in Q4 2016 to AED 311 million and total provisions for loans and advances reached AED 3.5 billion, constituting 145.5 per cent coverage for non-performing loans.


“The stabilisation in the business environment coupled with our sharp focus on asset quality has led to lower provisions for impairment, down 27 per cent from the previous quarter. We are well poised to take advantage of market opportunities, and will see better upside in profits if the operating environment remains stable,” he added.


Mashreq reported a consistently high proportion of net fee and commission income. The bank’s best-in-class non-interest income to operating income ratio remained high at 41.6 per cent. Its investment income, FX and other income increased by 17.9 per cent year-on-year.


The bank’s total assets decreased by 1.7 per cent in the year to reach AED 120.7 billion. Customer deposits declined slightly by 0.8 per cent to reach AED 76.4 billion, while its loan-to-deposit ratio remained healthy at 80.5 per cent at the end of March 2017.


Mashreq’s liquid assets to total assets stood at 28.1 per cent with cash and due from banks at AED 33.9 billion. Its capital adequacy ratio and Tier 1 capital ratio continue to be significantly higher than the regulatory limit and stood at 17.1 per cent and 16.2 per cent respectively.


Mashreq delivered stable financial results for the quarter ending March 2017, reporting a net profit of AED 546 million. Earnings per share are strong at AED 3.08 as of March 2017.


“As we celebrate our 50th year, we are thankful for the decades of support we have enjoyed from our clients and partners. We remain committed to these long term relationships as we look forward to 50 more years,” Al Ghurair concluded.


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