Mashreq posts record H1 profit before tax of Dh4.8b as deposits, lending surge

Dubai: Mashreq reported a record first-half profit before tax as strong growth in lending, customer deposits and fee income helped the UAE lender navigate a challenging regional environment.

The bank said profit before tax for the six months ended June 30 rose 18 per cent year on year to a record Dh4.8 billion, while operating income increased 10 per cent to Dh6.8 billion. Return on equity reached 21 per cent, supported by continued balance sheet expansion and higher customer activity.

Net profit after tax climbed 17 per cent to Dh4.05 billion, while second-quarter profit before tax rose 28 per cent from a year earlier to Dh2.53 billion.

Loans, deposits expand

Mashreq continued to grow its core banking business during the period, with customer deposits increasing 28 per cent year on year to Dh227.2 billion and customer lending rising 26 per cent to Dh169.1 billion.

The bank's total assets expanded 25 per cent to a record Dh365.7 billion, while shareholders' equity grew 19 per cent to Dh42.8 billion, reflecting retained earnings and continued business growth.

Mashreq said the strong inflow of deposits enabled it to expand its investment portfolio in high-grade liquid securities while keeping the loan-to-deposit ratio at 74 per cent.

Diversified income

Operating income was supported by growth across both interest and non-interest businesses.

Net interest income rose 7 per cent to Dh4.2 billion, while non-interest income increased 17 per cent to Dh2.6 billion, accounting for 38 per cent of total operating income. Fee and commission income grew 11 per cent on stronger transaction banking and trade finance activity, while investment income jumped 57 per cent on gains from the bank's investment portfolio.

Operating expenses increased 15 per cent to Dh2.14 billion as Mashreq continued investing in artificial intelligence initiatives, digital onboarding and technology infrastructure. Even so, the bank maintained a cost-to-income ratio of 31 per cent.

Strong asset quality

The bank said asset quality remained resilient despite the rapid expansion in lending.

Mashreq's non-performing loan ratio stood at 0.9 per cent, while coverage strengthened to 271 per cent. The bank also recorded a Dh122 million impairment writeback during the first half, compared with an impairment charge a year earlier, reflecting recoveries on previously written-off loans.

Capital strength also improved, with the capital adequacy ratio rising to 16.9 per cent, supported by a Dh7.1 billion increase in the bank's capital base to Dh44 billion. Liquidity remained robust, with a liquidity coverage ratio of 147 per cent.

Focus on AI, trade finance

Group Chief Executive Officer Ahmed Abdelaal said the bank's performance reflected the resilience of its diversified business model and disciplined execution despite regional and global uncertainty.

He said Mashreq would remain focused on disciplined growth in the second half of the year, while continuing to invest in artificial intelligence, digital capabilities, transaction banking and international trade corridors to strengthen client services and long-term growth.