Dubai: Mashreq Bank on Sunday reported Dh2.05 billion in net profit for 2017, up 6.5 per cent from the Dh1.93 billion recorded in 2016 as the bank benefited from higher investment income and lower impairments.
The gains in profits came even as total operating income for the year fell 2.5 per cent to Dh6 billion due to lower non-interest income, which dropped 6.3 per cent driven by lower fees and commissions.
Mashreq said in a statement that fee and commission income, which represents nearly 64 per cent of non-interest income, fell 7.5 per cent year-on-year to Dh1.6 billion. Investment income, however, jumped by around 85 per cent.
Discussing the results, Abdul Aziz Al Ghurair, chief executive officer of Mashreq, said the increase in profits in 2017 came “despite global economic uncertainty and the slight slowdown in the GCC region.”
“While there may be challenges ahead, I am confident that we are well-positioned to capitalise on the improving economic backdrop in the UAE. I look forward to seizing these opportunities and continuing this momentum into 2018,” he said in a statement.
Al Ghurair said that the bank plans to continue to focus on providing innovative services and strengthening its digital capabilities. The bank in 2017 launched Mashreq Neo, a full-service digital bank, which is the first of its kind in the region.
During the year, operating expenses fell 1.9 per cent year-on-year to Dh2.4 billion, Mashreq said. Impairment costs also fell by 14 per cent year-on-year to Dh1.5 billion.
On the balance sheet side, total customer deposits fell 1.3 per cent to Dh76.1 billion amid a decline in both Islamic and conventional deposits. Loans and advances, meanwhile, increased 2.9 per cent to reach Dh62.7 billion, driven by growth in Islamic finance.
Non-performing loans-to-gross loans ratio fell to 2.94 per cent at the end of December 2017, from 3.06 period at the same period in 2016.
Looking at the bank’s units, Mashreq said that its international business continued to deliver strong results, with nearly a quarter of the bank’s revenues coming from international business.
“While south Asia continues to be the key market for business, a large and growing chunk of net interest and fee income is now coming from business in Africa and Europe,” the bank said in its statement.
It added that the international business will continue to seek out new avenues of opportunities and potential to grow Mashreq’s international footprint in 2018. It, however, did not specify which markets it is eyeing for growth.
