Mashreq profit up 12.3% but investments decline

Dubai: An 86.43 per cent decline in investment income from Dh553 million to Dh75 million could not dent Mashreq's third quarter results as third quarter profit rose 12.3 per cent to Dh1.5 billion from Dh1.3 billion in the same period last year, a company statement said.

"However, investment income fell from Dh553 million to Dh75 million, mainly due to the decline in valuations and poor liquidity in the global and regional markets," the bank said in a statement.

Total assets of the group reached Dh94 billion, up 26.7 per cent from Dh74.2 billion at the end of Sep-tember 2007.

Customer deposits reached Dh51.7 billion, an increase of 17.7 per cent over last year's Dh43.9 billion, whilst customer advances increased 59.8 per cent, to Dh56.1 billion from Dh35.1 billion.

"The UAE banking sector remains resilient," said Abdul Aziz Al Ghurair, CEO of Mashreq. "Mashreq enjoys a long history of more than 41 years of trust of customers in the UAE. As the results show, Mashreq is in a very healthy status. We are committed to our expansion plans locally and regionally.

"The 2009 plan includes opening 12 new branches in the UAE and 10 new branches in Egypt."

The growth in total assets contributed to a marked increase in net interest income, and income from Islamic products net of distribution to depositors at Dh1,431 million, compared to Dh852 million for the same period last year, was an increase of 67.9 per cent.

Net fee, commission and other income recorded growth of 43 per cent over last year.

Total operating income grew 23.8 per cent to Dh3.2 billion against Dh2.6 billion last year.

In the third quarter of this year net interest income increased 70 per cent, while net fee commissions and other income and operating income for the quarter showed a 40 per cent increase over the third quarter of 2007.

Operating income was 14 per cent higher than in the same period last year.

However, due to the decline in investment income, the net profit in third quarter of this year was Dh346 million, 12.5 per cent lower then the net profit for the same period in 2007.

Since the start of the year, Mashreq opened seven new branches, taking the total number of UAE outlets to 54.

Badr Al Islami, the Islamic arm of Mashreq, opened two Badr Business outlets located at Al Riqa and Park Place.

By the end of this year, Mashreq plans to open a total of 11 Badr Business centres to help cater to the growing demand for Islamic finance.

Free talk time

Adding to Mashreq's growing product portfolio the company launched the new Etisalat Mashreq credit card which provides customers with free redeemable talk time.

Customers can now shop anywhere using the card and are awarded points which are then redeemed for free Etisalat mobile talk time.

Mashreq was also named the 'Best Bank in the UAE' for the fourth time by the 'Euromoney Excellence Middle East' awards.