Dubai: Mashreq on Wednesday reported a 34 per cent increase in its net profit for the first nine months of 2013 to Dh1.3 billion compared to Dh970 million at the end of September 2012.
The bank’s total operating Income for the period grew to Dh3.5 billion, an increase of 19.2 per cent compared to a year earlier, driven by both net interest income and net fee and commission income.
The bank’s net interest income at the end of September 2013 was up by 18.6 per cent compared to a year earlier, driven by 17.7 per cent year-on-year increase in loan volume and improvement in net interest margin from 2.51 per cent in September 2012 to 2.91 per cent this year. Customer deposits increased by 11.7 per cent during the same period to Dh53 billion at the end of September 2013.
“The results of the nine months are gratifying for more reasons than one. The strong underlying growth in our lending and deposits, the success of new product lines in delivering new revenues — like insurance and investment in our retail division, the extremely robust growth in the current account deposits in our corporate banking division have all contributed handsomely to this year-on-year growth in revenues and the bottom line,” said Abdul Aziz Al Ghurair, Mashreq’s CEO,
Mashreq’s net fee, commission and other income to operating income ratio remained high at 52.3 per cent, led by a 22.8 per cent growth in net fee and commission income and 36 per cent growth in other income.
Earnings per share strengthened to Dh7.70 at the end of September this year compared to Dh5.74 a year earlier.
Asset quality continued to improve as non-performing loans (NPLs) to gross loans ratio reduced from 9.4 per cent in December 2012 to 6.4 per cent at the end of September 2013.
Provisions for loans and advances, for the nine months, stood at Dh627 million, and total provisions for loans and advances reached Dh2.9 billion, constituting 87.9 per cent coverage for NPLs as on September 30, 2013.
Capital adequacy ratio and tier 1 capital ratio were at 18.2 per cent and 16.4 per cent respectively, at the end of September 2013.
In the third quarter, Mashreq’s total assets increased by 8.7 per cent to reach Dh83 billion, compared to Dh76.4 billion at the end of 2012. Liquid assets to total assets stood at 23 per cent with cash and due from banks at Dh19.1 billion at the end of the third quarter.
The Bank’s loan-to-deposit ratio increased to 92 per cent at the end of the third quarter as compared to 87 per cent in December 2012. The bank’s loan-to-total assets ratio also grew from 54 per cent to 59 per cent.