News Column

Mashreq posts 38% increase in FY13 profit

January 26, 2014

Mashreq, one of the UAE's leading financial institutions, has reported a 3 8 % increase in its Net Profit in 2013, climbing to AED1. 8 billion compared to AED 1.3 b illion at the end of Dec ember 2012. The bank's Total Operating Inc ome for the period grew to AED 4.8 billion, an increase of 18.4 % compared to a year earlier , driven by both Net Interest Income and Net fee and commission income. The bank's Net Interest Income at the end of Dec ember 2013 was up by 23.9 % compared to a year earlier, driven by 21.8 % year - on - year increase in loan volume and 39 bps imp rovement in net interest margin from 2. 5 5 % in Dec ember 2012 to 2. 9 4 % this year , which was predominantly led by change in balance sheet structure and composition of loans. Mashre q's best - in - class Net Fee, Commission and Other Income to operating income ratio remained high at 5 1 .3 % led by a 2 1.2 % growth in Net Fee and Commission Income and 23.2 % growth in Other Income. General and Administrative Expenses for the period increased by 10. 0 % compared to a year earlier to reach AED 2.0 billion; However Mashreq's Efficiency Ratio improved by 3. 2 % on a year - on - year basis to reach 42.2 % at the end of Dec ember 2013. Earnings per share strengthened to AED 10.68 at the end of Dec ember 2013 c ompared to AED 7.76 a year earlier. Asset quality continued to improve as Non Performing Loans to Gross Loans ratio reduced from 9.4% in December 2012 to 6. 0 % at the end of Dec ember 2013. Mashreq's Allowances for impairment, net , for 2013 , was AED 873 milli on, and Total Provisions for Loans and advances reached AED 3.10 billion, constituting 9 7 % coverage for Non Performing Loans as on Dec ember 3 1 , 2013. Mashreq's capital adequacy ratio and tier 1 capital ratio continue to be significantly higher than the re gulatory limit and stood at 18.2% and 16.4% respectively, at the end of Dec ember 2013. Mashreq's CEO, H.E. AbdulAziz Al Ghurair , said , "Our annual financials reflect solid and sustainable growth. We are constantly innovating to give our customers what t hey need, and a 38% increase in net profits to AED 1.8 billion underscores this. More and more people, whether retail or corporate customers, recognize that Mashreq is the bank of choice for them, providing the financial tools to allow them to manage their finances on their own terms." He continued: "The banking industry as a whole has enjoyed a strong 2013 which is good for the UAE . The banking industry is in a strong position and the performance of the banks can be used as a measure of wider economic p erformance, so a healthy banking industry is indicative of a healthy economy." Mashreq's Total Assets increased by 17.4 % to reach AED8 9.7 billion in 2013 , compared to AED76.4 billion at the end of 2012. Liquid Assets to Total Assets stood at 2 7 % with Cash and Due from Banks at AED 23.8 billion at the end of the fourth quarter. Loans and Advances grew by 21.8 % during 2013 to reach AED 50.4 billion, compared to AED41.4 billion at the end of December 2012 . Customer Deposits increased by 23.5 % during the same p eriod to stand at AED5 8.6 billion at the end of Dec ember 2013. T he B ank's Loan - to - Deposit ratio remained stable at 86 % at the end of 2013 as compared to 87% in December 2012 In 2013 , Mashreq has implemented and launched various products and services. Continuing to lead the innovation space in the financial industry and delivering revolutionary banking solutions, the Bank recently launched a UAE's first of its kind initiative 'E Cube Retail Concept in Dubai Internet City Branch. T h e same concept was extended to Dubai Mall branch, Ibn Battuta branch with further plans to enroll it across all branch network. The E Cube Retail Branch concept is a truly disruptive innovation and is a first of its kind globally. The innovation different iator comes not from just the comprehensive implementation of all the technologies, but in how content is delivered in an engaging experience and how consumers are intuitively interacting with technologies they have never seen before . Mashreq's Corporate Banking mission has been to drive relationship banking through customer centricity, ensuring that it is the primary bank of corporate clients. During last year , the Corporate Investment Banking recognized Global Transaction Services (GTS) launched a fully integrated online portal mashreqMATRIX. This is available to customers and provides a wide range of value - added services fulfilling their transactional banking requirements. It is the first such integrated GTS portal to be offered by any of the local ba nks in our region and marks yet another milestone in our journey towards innovative solutions for our corporate clients. The Bank led the OSN debut syndicated five - year financing facility for US$200 Million . Mashreq acted as the sole Mandated Lead Arrang er, Bookrunner and Underwriter for OSN . The transaction received an overwhelming response from international and regional banks and was heavily oversubscribed. The participating banks include: Barclays Bank PLC , BNP Paribas Fortis SA/NV, Citibank N.A ., HSB C Bank Middle East Ltd , and National Bank of Kuwait SAK. Mashreq continues to stay tuned to the needs of the market within the UAE and have geared its emphasis on providing innovative financial solutions towards growth in sectors such as real estate, eme rging corporate, infrastructure projects, Government and Related Entities (GRE), as well as many others. Mashreq's specialized and established teams have been equipped to serve future planned market growth and aspirations. Reflecting its commitment toward s the SME segment, Mashreq launched a Platinum Business MasterCard Credit Card. The card is designed to offer payment convenience to SME customers whereby owners, proprietors and authorized signatories can get the primary card and then extend the same bene fits to their employees by giving supplementary cards. Continuing pioneering innovation led banking solutions, Mashreq announced the launch of 'Mashreq Payport', the region's first fully EMV Chip & PIN compliant mobile POS solution. For businesses that a re dependent on cash to facilitate home deliveries or many other similar business segments, Mashreq Payport provides the ideal, convenient, secure and cost - effective solution. With Mashreq Payport, any standard smart phone can be converted into a full - fled ged payment acceptance terminal, all that is needed is to download the Mashreq Payport app on the phone and insert the card in the accompanying device. Customers can now look at paying anyone and anywhere using their cards using Mashreq's innovative Easy Cheque solution. The unprecedented product directly benefits credit card customers who can pay in any currency using their Mashreq cards, even at places where credit cards are not accepted. With the launch of Easy Cheque, Mashreq credit card customers can get a cheque straight out of their credit card account to make payments related to rental, property, education, investment or any other area where credit cards are not accepted. On another hand, the Bank re - launched the Mashreq Air Arabia Visa Platinum C redit Card, its co - branded card with Air Arabia , the region's first and largest low - cost airline. Through the unique Air Arabia Dirham program, the card provides the fastest route to earning and redeeming rewards; customers can earn Dirhams on card activat ion and for every purchase. From a Retail perspective, Mashreq UAE's Best Dining Program 'Mashreq Flavours' included more partners to reach over 700 restaurants across the UAE and launched a mobile application specifically designed for the dining program . The Bank launched Mashreq SmartSaver MasterCard Titanium Credit Card, offering 5% cash back on utility bill payments and 5% cash back on education spend. Customers will earn 1.25% cash back on domestic retail purchases on the Card and 3.25% cash back on International retail spends. Continuing its pioneering strategy to launch 'first of its kind' financial solutions, Mashreq launched 'Mashreq Max' a revolutionary banking experience that delivers the bank to the customers, elevating customer service to ne w heights. When a customer opens a Salary Transfer Account, a Samsung Tab with preloaded banking services will be delivered to him. It's not just convenience. The MAX pack also includes a range of services and offers giving tremendous value to all users. To offer further convenience to its customers, Mashreq upgraded the enhanced version of its Mobile Banking Service called 'Snapp'. Customers can access Mashreq Snapp using their MashreqOnline username and password. There is no requirement to register sepa rately for Mobile Banking. It is now available on the Windows 8 platform. In line with its commitment to customers, Mashreq signed a Memorandum of Understanding with Emirates Group. The partnership enables Emirates Group staff to use e - letter functiona lity when availing retail financial products from Mashreq. Emirates Group staff can now apply for a salary transfer letter or salary certificate by applying through their HR online portal and a reference number will be generated for the same. Mashreq sta rted offering Auto Financing with a 24 hours approval convenience with a gamut of benefits, such as free first - year Platinum Elite Credit Card, free Overdraft facility, free Current Account, competitive insurance rates and other benefits. Business Bankin g upgraded its Small Business Loan, which is now available to companies with only 2 years of business vintage offering a loan size of up to 1.5 Million AED. Mashreq recently also launched Self Employed Personal Loan (SEPL) to customers. SEPL is an installm ent loan product designed to cater to the resident UAE Self Employed Professional such as Doctors, Accountant, and Consultants etc. and Small Business Owners constituting of Sole Proprietorship, Partnership, Free Zone Establishment, Limited Liability compa nies etc. All loans will be availed in the personal name of the customer and can go up to AED 600,000. Focusing on Islamic Banking, Mashreq Gold the Premium Banking service now offers Sharia'h Compliant products and services. While Mashreq Al Islami lau nched a Platinum Credit Card that balances tradition with modernity and offers customers unmatched benefits that are clear, easy to unde rstand and above all, Sharia'h C ompliant. The new card will can be obtained instantly in 30mins across the Mashreq Go branches. In line with the country's goal of becoming the Islamic economic Capital under the supervision of Islamic - Compliant regulators, Mashreq Al Islami, the Islamic banking arm of Mashreq Group , recently launched a comprehensive suite of Islamic busin ess solutions including Islamic business finance of up to AED1.5million, Islamic business current accounts offering a range of banking solutions on multiple business accounts, attractive and customized Takaful for life cover and savings plans, as well as I slamic treasury solutions. ; All Rights Reserved - Mubasher Info

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Source: Mubasher (Saudi Arabic)

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