Dubai: Mashreq on Sunday reported a net profit Dh1.5 billion for the first nine months of the year posting year on year decrease of 9.4 per cent compared to the normalised (adjusted for the impact of recoveries) net profit for the same period last year.
For the third quarter of the year the bank reported a net profit of Dh875 million, up 0.9 per cent compared to Dh868 million in the same period last year. Total operating income for 9 months of 2016 was Dh4.7 billion, a year-on-year increase of 4.6 per cent compared to the same period last year. Operating profit increased by 9.2 per cent, year-on-year to Dh2.9 billion.
“We took clear decisions at the outset to continue to grow by improving share of wallet of our existing customers and selectively on boarding new-to-bank quality customers. The impact of these decisions are reflected in the bank’s top line revenue growth of 5 per cent,” said AbdulAziz Al Ghurair, CEO of Mashreq.
Net Interest Income, net income from Islamic products and interest earned on marketable securities were at Dh2.7 billion up 4.9 per cent compared to 9 months of 2015. There has been a decrease of 9 bps in net interest margins during the 9-month period.
Total non-interest income increased by 4.2 per cent year-on-year to reach Dh2 billion. Net fee and commission income represented 65 per cent of total non-interest income in 9 months of 2016 as compared to 68 per cent the same period last year.
Operating expenses decreased by 2 per cent year-on-year and by 3 per cent quarter-on-quarter to reach Dh1.8 billion.
“Our continued efforts in cost reduction for the last 3 quarters have led to a good 2 per cent improvement in costs. The combined effect of revenue growth and cost reduction has delivered a solid 9 per cent growth in operating profit for the first 9 months of 2016,” Al Ghurair said.
The bank’s total assets were up by 3.9 per cent to reach Dh119.6 billion in at the close of the third quarter of 2016, compared to Dh115.2 billion at the year end of 2015.
Loans and advances increased by 3.5 per cent year to date to Dh62.3 billion. On a year-on-year basis, loans and advances grew by 6.7 per cent driven by 23 per cent growth in Islamic finance.
Customer deposits increased by 2.2 per cent year to date to Dh75.3 billion driven by an increase in conventional deposits. Loan-to-deposit ratio stood at 82.8 per cent compared to 81.7 per cent at year-end 2015.
Non-performing loans (NPLs) stood at Dh2.7 billion in September 2016 leading to a non-performing loans to gross loans ratio of 3.6 per cent at the end of September 2016 compared to 2.8 in December 2015. Total provisions for loans and advances reached Dh3.6 billion, constituting 136 per cent coverage for NPLs as of September 2016.
Mashreq’s capital adequacy ratio and Tier 1 ratios stood at 16.7 per cent and 15.7 per cent, respectively at the close of the third quarter of this year.
