News Column

Mashreq posts 38 per cent increase in net profit

January 26, 2014

Babu Das Augustine Deputy Business Editor

Dubai - Mashreq on Suday has reported Dh1.8 billion net profit in 2013 up 38 per cent compared to Dh1.3 billion in 2012. The bank's total operating income for the period grew to Dh4.8 billion, an increase of 18.4 per cent compared to a year earlier. Surge in net interest income and net fee and commission income boosted its profits for the full year 2013. Mashreq's net interest income at the end of December 2013 was up by 23.9 per cent compared to a year earlier, driven by 21.8 per cent year-on-year increase in loan volume and 39 basis points improvement in net interest margin from 2.55 per cent in December 2012 to 2.94 per cent this year. "Our annual financials reflect solid and sustainable growth. We are constantly innovating to give our customers what they need, and a 38 per cent increase in net profits to Dh1.8 billion underscores this," said AbdulAziz Al Ghurair , Mashreq's CEO. The bank's net fee , Commission and Other Income to operating income ratio remained high at 51.3 per cent led by a 21.2 per cent growth in net fee and commission income and 23.2 per cent growth in other income. Mashreq's asset quality continued to improve as non performing loans to gross loans ratio reduced from 9.4 per cent in December 2012 to 6 per cent at the end of December 2013 . The bank's allowances for impairment, net, for 2013, was Dh873 million, and total provisions for loans and advances reached Dh3.10 billion, constituting 97 per cent coverage for non performing loans as on December 31, 2013 . Bank's total assets increased by 17.4 per cent to reach Dh89.7 billion in 2013, compared to Dh76.4 billion at the end of 2012. Loans and advances grew by 21.8 per cent during 2013 to reach Dh50.4 billion, compared to Dh41.4 billion at the end of December 2012 . Customer Deposits increased by 23.5 per cent during the same period to stand at Dh58.6 billion at the end of December 2013 . The Bank's loan-to-deposit ratio remained stable at 86 per cent at the end of 2013 as compared to 87 per cent in December 2012 . Mashreq's capital adequacy ratio and tier 1 capital ratio continue to be significantly higher than the regulatory limit and stood at 18.2 per cent and 16.4 per cent respectively, at the end of December 2013 . Earnings per share strengthened to Dh10.68 at the end of December 2013 compared to Dh7.76 a year earlier. "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 performance, so a healthy banking industry is indicative of a healthy economy," said Al Ghurair .


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Source: Gulf News (United Arab Emirates)


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