Dubai:
Mashreq Bank said on Wednesday net profit for 2016 fell to 1.9 billion, compared to the Dh2.4 billion recorded in 2015.
“While the region weathered tough business conditions in 2016, Mashreq had a reasonable year despite the economic climate and low oil prices,” Abdul Aziz Al Ghurair, Mashreq’s chief executive officer, said in an emailed statement.
Total operating income for 2016 was at Dh6.2 billion, a year-on-year increase of 3.2 per cent compared to 2015 operating income of Dh6 billion.
“We are pleased with the strong year end finish and the improving trend in net profit in the fourth quarter,” Al Ghurair said. The bank’s fourth quarter net profit rose 6.3 per cent against the third quarter of 2016.
Bad loans
Non-Performing Loans (NPL) to Gross Loans ratio decreased to 3.1 per cent at the end of December 2016. The ratio was at 3.6 per cent as of September 2016.
The risk charge for the year increased to Dh1.7 billion from Dh1 billion and total provisions for loans and advances reached Dh3.3 billion, constituting 151.1 per cent coverage for NPL.
Net interest income and net income from Islamic products up by 4.2 per cent year-on-year, on the back of a 1.4 per cent y-o-y increase in loan volume.
Mashreq’s total assets increased by 6.6 per cent to reach Dh122.8 billion in 2016, compared to Dh115.2 billion at the end of 2015.
On a year-on-year basis, loans and advances grew by 1.4 per cent to end at Dh61.0 billion driven by 14.4 per cent growth in Islamic finance. Liquid Assets to total assets stood at 30.4 per cent with cash and due from banks at Dh37.3 billion as of December 2016.
Customer deposits at Dh77 billion, increased by 4.6 per cent as compared to December 2015, driven by 7.2 per cent growth in conventional deposits. Loan-to-Deposit ratio stood at 79.2 per cent as against 81.7 per cent in December 2015.
On a quarter on quarter basis, customer deposits grew by 2.3 per cent from Dh75.3 billion in September 2016.
Outlook:
“Mashreq is in a very strong position as it enters 2017 with a diversified balance sheet and customer base,” Al Ghurair said.
“With the government’s continued focus on economic diversification, investment in non-hydrocarbon assets, and its smart city initiatives, Mashreq’s strategy on innovation and focus on customer experience will serve us well as we enter our 50th year,” he added.
