Robust income growth and low risk cost drive Mashreq profit

Net profit surges 122% to Dh5.8 billion in the first 9 months of 2023

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Somshankar Bandyopadhyay

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Mashreq’s operating profit surged from Dh3.2 billion to Dh5.6 billion for the first nine months of 2023. — File photo
Mashreq’s operating profit surged from Dh3.2 billion to Dh5.6 billion for the first nine months of 2023. — File photo

Published: Thu 26 Oct 2023, 6:35 PM

Mashreq announced on Thursday that its net profit soared to Dh5.8 billion for the first nine months of 2023, a jump of 122 per cent year-on-year.

The Dubai lender’s operating profit surged from Dh3.2 billion to Dh5.6 billion for the first nine months of 2023, a 73 per cent increase compared to the same period in 2022.


The increase in operating income and net profit is primarily attributed to a significant 82 per cent increase in net interest income. This growth is a result of several factors, including the expansion of its balance sheet, healthy client margins, and the prevailing high-interest rate environment. Non-interest income has reached Dh2.3 billion, marking an 8.1 per cent year-on-year growth for the first nine months of 2023.

The bank has demonstrated a positive jaws ratio of 34.8 per cent for the first nine months of 2023, and the cost-income ratio has improved by over 8 per cent year-on-year. This indicates effective control over operating costs while enabling continued investments in enhancing our client experience, risk management and supporting business growth.


The allowance for impairments has experienced a net release of Dh341 million, driven by a decrease of 69 per cent year-on-year in low-risk charges, amounting to Dh244 million.

“This performance is attributed to our successful growth strategy, commitment to customer excellence, strong operating performance, efficient cost management, and prudent risk management capabilities,” the bank said in a statement.

Return on Equity (RoE) reached a record-high of 32.1 per cent for the first nine months of 2023, doubling compared to the first nine months of 2022. Earnings per share stood at Dh28.75.

High liquidity was denoted by a liquid assets ratio of 32.3 per cent and an efficient liquidity coverage Ratio of 126.6 per cent as of September 2023.

The bank’s capitalisation level remains robust with the capital adequacy ratio at 18.6 per cent, Tier 1 Capital ratio at 16.3 per cent and CET1 ratio at 15.6 per cent as of September 2023.

Overall loan portfolio quality improved significantly with gross impairments to gross assets at just 0.2 per cent (0.8 per cent in the first nine months of 2022).

The non-performing loans to gross loans ratio declined to 1.5 per cent as of end of September 2023 (2.2 per cent as of December 2022) and is one of the lowest in the market.

Total provision for loans and advances reduced to Dh4.0 billion in September 2023 from Dh4.8 billion in December 2022 and coverage ratio improved to 222.9 per cent as on 30th September 2023 (190.8 per cent in December 2022).

AbdulAziz Al Ghurair, Chairman of Mashreq.
AbdulAziz Al Ghurair, Chairman of Mashreq.

AbdulAziz Al Ghurair, Chairman of Mashreq, said: “The UAE banking sector continues to demonstrate remarkable resilience and growth, laying a strong foundation for the entire financial landscape of the country. Our recent achievement, a remarkable 122 per cent year-on-year surge in net profits, stands as a testament to Mashreq’s enduring strengths and forward momentum. However, our vision extends beyond numbers. At Mashreq, we are firm in spearheading the region’s sustainability journey by offering tailored financial solutions that catalyse the transition to a greener economy, paving the way for the UAE’s goal of Net Zero by 2050. Through our association with COP28, we reiterate our dedication to combating climate change and championing a sustainable tomorrow. It is a time of reinvention, of looking ahead, and ensuring that as leaders in the banking industry, we not only drive profits but also champion the cause of a sustainable future for all.”

Ahmed Abdelaal, Group Chief Executive Officer, Mashreq
Ahmed Abdelaal, Group Chief Executive Officer, Mashreq

Ahmed Abdelaal, Group Chief Executive Officer, Mashreq, said: “Mashreq’s remarkable financial performance this year is a clear reflection of our relentless commitment to innovation and putting our customers first. The significant growth in net profit to Dh5.8 billion in the third quarter, spurred by an 82 per cent increase in net interest income, underlines our strength and adaptability in an ever-changing financial landscape. Internationally, we continued to see the benefits of our diversified business model and strong balance sheet growth and our digital strides in Pakistan and licensing in Oman usher in a new era of exciting global growth. Our digital transformation continues to gain momentum with strategic partnerships with the likes of Alipay through NeoPay, enhancing our position in the digital banking revolution.

“Looking ahead, our strategy is multifaceted. Beyond financial investment, we aim to elevate the customer experience, fortify our security measures with cutting-edge fraud prevention, and optimize operations through automation. We are enthusiastic about amplifying our digital capabilities, especially by harnessing AI and nurturing flagship digital platforms like Neo and NeoBiz. Our journey has been commendable, but our vision remains expansive, awaiting the countless possibilities the future holds.”



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