Mashreq posts $11.71mln net profit in Q1

The bank's first-quarter operating income surged by 19.7% over the previous quarter

  
People walk out of a branch of Mashreq bank at Dubai Internet City in Dubai.

People walk out of a branch of Mashreq bank at Dubai Internet City in Dubai.

REUTERS/Nikhil Monteiro

Leading UAE financial institution Mashreq reported on Thursday a Dh43 million net profit for the first quarter of 2021.

The bank said in a statement that its first-quarter operating income surged by 19.7 per cent over the previous quarter to Dh1.4 billion due to improvements in net interest income and fees and commission.

Non-interest income to operating income ratio improved to 50.5 per cent while operating profit increased to Dh789 million compared to the fourth quarter of in 2020, mainly as a result of increased operating income and reduced operating expense, the bank said. Impairment allowance has reduced from Dh1.7 billion in the last quarter of 2020 to stand at Dh 711 million. “This has helped shift Mashreq into a profitable position in Q1 2021,” the lender said.

The bank recorded a growth of 2.2 per cent in customer deposits to Dh90.2 billion. Its liquid assets ratio stood at 28.8 per cent with cash and due from banks at Dh42.4 billion as on March 31, 2021, while capital adequacy ratio and Tier 1 capital ratio stood at 14.4 per cent and 13.3 per cent, respectively.

AbdulAziz Al Ghurair, chairman of Mashreq, said the bank has continued to follow a prudent risk policy, which is reflected in the level of provisions.

“We feel fortunate to be operating in the UAE, where the country’s leadership continues to take proactive measures to respond to the current pandemic and protect business interests. While we still expect the first half of the year to remain challenging, we continue to be cautiously optimistic about an economic recovery in the second half of the year,” he said.

“Looking ahead, we remain focused on expanding the bank’s digital offering through enhancing our operating model and continuing to strategically invest in key technology platforms to offer a seamless experience to our customers. This will ensure that we continue to generate solid returns for our shareholders and remain ahead of the existential change impacting our industry.”

Ahmed Abdelaal, group CEO of Mashreq Bank, said the lender’s financials remain stable, as evidenced by its capital adequacy ratio and overall liquidity.

“Additionally, our core businesses across retail banking, corporate and investment banking, as well as our international franchises remain strong, continue to generate sound earnings, and are well positioned for future growth as we emerge from the pandemic,” he said.

“Our strategic focus on customer experience continues to drive our activity across the bank, from our digital investments to our investment in people. We’ve seen acceleration in our digital transformation from the branches to our partnerships with FinTechs, and are investing in solutions that are innovative, creative but more importantly add value to our customers and shareholders,” said Abdelaal.

He said the bank is confident that its recent initiatives would position it strongly to deliver its core objective of meeting the evolving needs of clients, as well as delivering operational cost efficiencies.

 

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