Dubai’s Mashreq Posts 38% Rise In 2013 Net Profit

Dubai-based lender Mashreq reported a 38 per cent increase in its net profit in 2013, to reach Dhs1.8 billion compared to Dhs1.3 billion in 2012.

The bank’s total operating income for the year also increased to Dhs4.8 billion, up 18.4 per cent year-on-year, driven by both net interest income and net fee and commission income, the lender said in a statement.

Net interest income was up 23.9 per cent during the period, driven by a 21.8 per cent increase in loan volume and 39 bps improvement in net interest margin from 2.55 per cent in December 2012 to 2.94 per cent last year.

Net fee and commission income grew 21.2 per cent, while other income rose 23.2 per cent in 2013. The bank’s general and administrative expenses increased by 10 per cent to reach Dhs2 billion during the period.

Earnings per share hit Dhs10.68 at the end of December 2013 compared to Dhs7.76 a year earlier, Mashreq said.

Mashreq’s CEO, Abdulaziz Al Ghurair, said, “The banking industry as a whole has enjoyed a strong 2013 – which is good for the UAE. The banking industry is in a strong position and the performance of the banks can be used as a measure of wider economic performance, so a healthy banking industry is indicative of a healthy economy.”

Loans and advances grew by 21.8 per cent in 2013 to reach Dhs50.4 billion, while customer deposits increased by 23.5 per cent during the period. Total assets increased by 17.4 per cent to reach Dhs89.7 billion last year.

Mashreq also stressed that its capital adequacy ratio and tier 1 capital ratio continue to be “significantly higher than the regulatory limit” and stood at 18.2 per cent and 16.4 per cent respectively, at the end of December 2013.

The lender has now geared its emphasis on providing financial solutions in sectors such as real estate, emerging corporate, infrastructure projects and government and related entities (GRE), the statement added.