Dubai: Dubai-based lender Mashreq reported a 88 per cent increase in operating profit at Dh3.7 billion in H1-2023, it said on Wednesday, while net profit stood at Dh3.5 billion.
Impairment allowance reduced to Dh54 million during the same period on the back of enhanced asset quality and higher recoveries and represents only 0.1 per cent of net loans, the bank added.
“In testament to the strategic execution of our vision, Mashreq has achieved a remarkable 150 per cent surge in net profit to Dh3.5 billion for the first-half of 2023,” said Abdul Aziz Al Ghurair, Chairman of Mashreq. “As we demonstrate our financial prowess, we also take pride in providing our shareholders with impressive value, as evidenced by an annualised return on equity exceeding 30 per cent.”
Total loans and advances increased by 5.2 per cent at Dh95 billion, while the loan-to-deposit ratio remained stable at 74.9 per cent. The bank's customer deposits stood at Dh126.7 million in H1-2023, up 16 per cent from Dh109.3 million same period last year.
“Assessing Mashreq’s robust performance in the first half of 2023, it is evident that our strategic initiatives have been instrumental in shaping this success,” said Ahmed Abdelaal, Group CEO. “With an exceptional 88 per cent y-o-y increase in operating profit, rising to Dh3.7 billion, and a marked reduction in our cost-to-income ratio to 28.3 per cent, the strength of our approach is clear.”
The bank’s non-interest income to operating income ratio stood at 39 per cent during the period.
Mashreq’s operating income growth was primarily driven by net interest income which has increased significantly by 96.3 per cent to Dh3.61 billion, compared to Dh1.84 billion same time last year. This comes as a result of growth in the loan portfolio and the high-interest rate environment; the non-interest income to total income ratio currently stands at 29.5 per cent.