Mashreq posts Dh85m profit for first half

Mashreq, a leading Dubai-based financial institution, reported on Wednesday a net profit of Dh85 million during the first half of 2021 despite the pandemic and its far-reaching impacts.

The bank said in a statement that its operating income rose by 1.4 per cent over the previous year to Dh2.9 billion due to improvements in fees and commission while its non-interest income to operating income ratio improved to 49.8 per cent (47.1 per cent as of June 2020).

The bank said its first-half operating profit of Dh1.6 billion is a 4.6 per cent increase compared to the same 2020 period “as a result of increased operating income and reduced operating expense.”

The lender’s impairment allowance stands at Dh1.5 billion compared to Dh978 million for 1H 2020, “reflecting conservative provisioning policy.”

AbdulAziz Al Ghurair, chairman of Mashreq Bank, said the bank was fortunate to have been steered through the pandemic and its far-reaching impacts by a national leadership that has taken proactive measures to protect business interests, jobs and economic stability.

“As regional and global markets adjust to the dynamics of a partially vaccinated world population and a fast-evolving virus, the near to mid-term-outlook remains uncertain,” he said.

The extension of TESS to June 2022 reflects this reality. “However, we remain cautiously optimistic that with the continued support of the UAE government, a sustained economic recovery and Mashreq’s ongoing digital transformation, the future looks promising,” said Al Ghurair.

“Given the changing dynamics of the workplace, our operating model to ‘Work from Anywhere’ means the bank is well placed to leverage the full potential of its key technology platforms to offer a seamless experience to our customers. These attributes will ensure that we continue to generate solid returns for our shareholders and remain ahead of the existential change impacting our industry,” Al Ghurair said.

The bank’s focused strategy and advanced digital transformation program served Mashreq well throughout the first half of 2021. “These fundamentals have ensured that the bank’s financial strength remains robust throughout the period, as evidenced by our capital adequacy ratio of 14 per cent, Tier 1 ratio of 12.8 per cent and a liquid-to-total-assets ratio of 31.8 per cent,” said Ahmed Abdelaal, group CEO, Mashreq Bank.

He said the bank’s core businesses across retail banking, corporate and investment banking, and its international franchises remain strong. Loan growth has grown by 8.0 per cent.

“These results are in line with the broader economic recovery and are a testament to the efficacy of the bank’s deep customer relationships and customer-centric strategy,” said Abdelaal.

The bank also saw a year-to-date growth of 8.1 per cent in customer deposits and a high share of CASA of over 57 per cent which points towards growing confidence in the national economy. That confidence is tempered by a conservative risk policy, which in H1 contributed to a higher level of provisions but a reduction of 20 bps in our nonperforming loan (NPL) ratio.

— issacjohn@khaleejtimes.com