Dubai: Mashreq on Wednesday reported a 40 per cent increase in net profit for the first half of 2014, climbing to Dh1.16 billion as compared to Dh828 million in the first half of 2013.
The bank’s net profit in the second quarter reached Dh585 million, an increase of 45 per cent from last year.
“Our first half results underscore the fact that the bank is steaming ahead to a record year in a sustained manner, recording both top and bottom line growth because of equally strong performances from the corporate, retail and international divisions,” said Abdul Aziz Al Ghurair, Mashreq’s CEO.
The bank’s total operating Income for the first half of 2014 grew to Dh2.9 billion, an increase of 26.4 per cent compared to a year earlier, driven by both net interest income and net fee and commission income. Net interest income at the end of June 2014 was up by 38.1 per cent compared to a year earlier.
Mashreq’s net fee and commission income grew 25.7 per cent in the first half of the year resulting in its net fee, commission and other income to operating income ratio at 49.5 per cent. The bank’s net investment income was up 30 per cent over the first half of last year.
Total assets increased by 15.9 per cent to reach Dh103.9 billion in June 2014, compared to Dh89.7 billion at the end of 2013. Loans and advances grew by 11 per cent during the first half of 2014 to reach Dh56 billion, compared to Dh50.4 billion at the end of December 2013 and customer deposits increased by 20.7 per cent during the same period to Dh70.6 billion.
The bank’s loan-to-deposit and loan-to-total assets ratio stood at 79 per cent and 54 per cent respectively at the end of the first half.
Asset quality
Asset quality continued to improve as non performing loans (NPLs) to gross loans ratio reduced from 6 per cent in December 2013 to 5.7 per cent at the end of June 2014. Mashreq’s allowances for impairment, net, for the first half of 2014, was Dh556 million, and total provisions for loans and advances reached Dh3.6 billion, constituting 105 per cent coverage for NPLs as on June 30, 2014.
Mashreq’s capital adequacy ratio and tier 1 capital ratio continue to be higher than the regulatory limit and stood at 16.1 per cent and 14.7 per cent respectively, at the end of June 2014.
“Seeing how the UAE economy is picking up speed, we believe that this is the time when banks that will benefit the most will be those who are genuinely committed to putting their customers first and investing in the innovative platforms needed by the smart banking public in our market,” Al Ghurair said.
