Dubai: Mashreq on Sunday reported Dh651 million net profit for the first quarter of 2015, up 13.2 per cent compared to the same quarter last year.
Total operating income for the quarter was up 8 per cent to Dh1.49 billion compared to Dh1.38 billion in the first quarter of 2014. Net interest income at Dh804 million was up by 17.2 per cent compared to a year earlier. On quarter on quarter basis, net interest income fell by 1.3 per cent as compared to Dh814 million in the fourth quarter of 2014.
“Our results reflect the continued stability of the UAE economy in the face of the disruption in the oil market. The banking industry and Mashreq in particular has displayed a remarkable immunity to the resultant economic turmoil in the region,” said Mashreq’s CEO, Abdul Aziz Al Ghurair.
Mashreq’s net fee, commission and other income fell by 1.1 per cent year-on-year to reach Dh688 million as a 2.3 per cent fall in net fee and commission income and 31.3 per cent drop in investment income. This was offset by 12.1 per cent increase in other income.
Operating expenses increased by 15.3 per cent year-on-year and 1.3 per cent quarter-on-quarter to reach Dh605 million.
Mashreq’s total assets increased marginally by 1 per cent to reach Dh106.9 billion at the close of the first quarter of 2015, compared to Dh105.8 billion at the end of 2014. Total loans and advances decreased slightly by 2.4 per cent during the first three months of 2015 to reach Dh56.7 billion, compared to Dh58 billion at the end of December 2014. On a year-on-year basis, first quarter loans and advances grew by 6.4 per cent driven by 7.2 per cent growth in conventional loans. Liquid assets to total assets stood at 29 per cent with cash and due from banks at Dh31.1 billion at the end of the first quarter.
Total provisions
On the liabilities side, customer deposits at Dh71.2 billion, increased by 3.9 per cent as compared to December 2014, driven by 12.6 per cent growth in Islamic deposits and 3.2 per cent growth in conventional deposits. Loan-to-Deposit ratio stood at 79.6 per cent compared 84.8 per cent in December 2014. On a year-on-year basis, customer deposits grew by 15 per cent from Dh61.9 billion in March 2014.
Non-performing loans (NPL) remained stable at Dh2.7 billion in March 2015 leading a NPL to gross loans ratio of 3.7 per cent at the end of March 2015. Net allowances for impairment for the first quarter of this year was Dh196 million as compared to Dh251 million in the same period last year. Total provisions for loans and advances reached Dh3.4 billion, constituting 131 per cent coverage for NPLs at the close of the first quarter.
While the bank’s capital adequacy ratio stood at 16.2 per cent, Tier 1 capital ratio was at 15 per cent at the close of the first quarter. Earnings per share strengthened to Dh3.67 at the end of March 2015 compared to Dh3.40 a year earlier.
“We continue to benefit from an ongoing strong balance sheet, stable earnings and healthy liquidity. The importance of these fundamentals cannot be overstated. They enable us to put substantial resources into innovating and perfecting the market-leading products which our name is now synonymous with,” said Al Ghurair.
