Tuesday, Nov 02, 2010

(This story was originally published Monday.)

DUBAI (Zawya Dow Jones)--Dubai-based Mashreq Bank PSC (MASQ.DFM) said third-quarter net profit fell 3.2% year on year to 194 million U.A.E. dirhams ($53 million), while net profit for the first nine months slumped 42%, as the lender continued to set aside cash for bad loans.

In a statement posted on the Dubai Financial Market website Monday and dated Oct. 31, Mashreq said earnings per share for the third quarter stood at AED1.15 compared with AED1.19 in the corresponding period in 2009.

Net profit for the first nine months of the year slumped 42% to AED647 million from AED1.12 billion in the year-earlier period, Mashreq said.

"Mashreq continues with prudent provisioning policies and the bank has set aside AED317 million for the third quarter," the lender said. Total provisions for the first nine months stood at AED1.21 billion compared with AED1.38 billion in the same period in 2009, it added.

The lender's third-quarter net fee and commission income dropped 48% to AED244 million, while operating income for the period fell 35% to AED930 million.

"The core fees and other income, after excluding certain one time gains recorded last year has dropped by 13% due to the reduction in banking products fees and foreign exchange income," Mashreq said.

Loans and advances as of Sept. 30 declined to AED43.3 billion from AED47.7 billion at the end of December, while customer deposits fell 8.2% to AED49.2 billion during the same period. The bank's advances-to-deposits ratio stood at 88%, Mashreq said.

The bank's capital adequacy ratio at the end of September was 22.3% compared with 20.2% at the end of 2009, while its tier 1 ratio rose to 15.6% from 14% during the period.

"In spite of the difficult global financial environment, Mashreq has delivered a robust performance during the first nine months of the year. Our well diversified and stable revenue streams highlight the sustainability of our operating strategy in these uncertain times," Abdul Aziz Al Ghurair, Mashreq Bank's chief executive officer, said in the statement.

-By Dubai Bureau, Dow Jones Newswires; +9714 446-1686; djnews.dubai@dowjones.com

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02-11-10 0343GMT