Dubai
Mashreq, one of the leading financial institutions in the UAE has reported a 12 per cent increase in its net profits for the first nine months of 2017 to Dh1.7 billion.
Net profit for the third quarter of 2017 increased by 35 per cent year on year to Dh561 million compared to the third quarter of 2016 and 0.6 per cent quarter on quarter.
Impairment allowances for the first nine months of 2017 were down by 30 per cent year on year as operating expenses were lower by almost 2 per cent on the back of effective cost management, Mashreq said in a statement.
“It has been a period of muted growth for the UAE banking system with the banking sector gross credit growing by only 0.3 per cent as of August 2017. However, at Mashreq we have been successful in increasing our loan book by 6 per cent year to date. With a focus on cost management that has seen us reduce operating expenses by 1.7 per cent year on year and a strong 30 per cent decline in credit costs,” said Mashreq’s CEO, AbdulAziz Al Ghurair.
Total operating income for the first nine month of 2017 was Dh4.4 billion, down by 4.9 per cent compared to Dh4.7 billion during the same period last year due to a fall in non-interest income.
Net interest income and income from Islamic Financing remained stable at Dh2.7 billion year on year. Net interest margin for nine months of 2017 has increased to 3.45 per cent compared to 3.37 per cent at the end of first half of 2017.
Though investment income increased by 73.8 per cent, total non-interest income fell by 11.3 per cent as net fee and commission decreased by 9 per cent year on year to reach Dh1.2 billion. Operating expenses for the first nine months decreased by 1.7 per cent year on year to reach Dh1.8 billion.
Total assets remained stable at Dh121.8 billion while loans and advances increased by 6 per cent to reach Dh64.7 billion as compared to December 2016 customer deposits remained steady year to date at Dh76.1 billion loan-to-deposit ratio remained at 85 per cent at the end of September 2017
The banks’ non-interest income to operating income ratio remained high at 39.8 per cent as investment income surged by 73.8 per cent year on year.
The bank continued maintain strong asset quality with non-performing loans to gross loans ratio of 3.7 per cent at the end of September 2017. Net Allowances for impairment for the first nine months of 2017 were Dh916 million compared to Dh1.3 billion in the same period in 2016, a 30 per cent year on year decrease. Total provisions for loans and advances reached Dh3.8 billion, constituting 134.4 per cent coverage for non-performing loans as of September 2017.
The bank’s capital adequacy ratio stood at 18 per cent as of 30 September 2017, compared to 16.9 per cent at year-end 2016. Tier 1 capital ratio was at 17.1 per cent at the close of the third quarter 2017.
