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Al Masraf stages strong comeback with Dh132 million profit in 2021

The Abu Dhabi-based lender said net profit rose 115 per cent in 2021 and it’s financial position remained sound with the customers’ deposits increasing by one per cent to reach Dh16.4 billion

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Arab Bank for Investment and Foreign Trade, popularly known as Al Masraf, on Monday staged a strong comeback with Dh132 million net profit last year compared to a loss in 2020.

The Abu Dhabi-based lender said net profit rose 115 per cent in 2021 and it’s financial position remained sound with the customers’ deposits increasing by one per cent to reach Dh16.4 billion as compared to Dh16.2 billion in 2020.

It further said that current and saving account balances increased to Dh5.3 billion compared to Dh4.7 billion in 2020 whilst term deposits were slightly lower at Dh11.1 billion last year from Dh11.6 billion in 2020 as the Bank continued to improve its funding mix.

“Against a backdrop of an improving but challenging economic environment, the bank successfully transitioned from a difficult 2020 to profitability as the bank maintained its vigil on asset quality leading to an improvement in cost of risk in line with the Bank’s de-risking strategy. These results obviously reflect the careful execution of the transformation strategy led by the Bank’s management team which paved the way for a return to profitable operations,” Farhat Omar Ben Gdara, chairman of the board of directors of Al Masraf, said.

Investment portfolio

The bank’s investments portfolio increased by 32 per cent to Dh3.24 billion in 2021 compared to Dh2.45 billion in 2020 mainly due to investments in M-bills. In line with the bank’s focus on asset quality, loans and advances decreased by five per cent to Dh14.9 billion while total assets reduced by six per cent to Dh22.5 billion.

The level of impairment charges reduced significantly in 2021 to Dh359 million compared to Dh1.377 billion in 2020 while enhancing the loan loss coverage. The balance sheet remains strong with capital adequacy ratios and liquidity metrics being well ahead of the regulatory requirements.

“We look ahead to 2022 with confidence and optimism. The steady return to growth across various sectors of the national economy, and the ongoing application of the bank’s digital and transformation strategies will provide a strong platform for growth in the future,” Ben Gdara said.

Charles Doghlass, deputy chief executive officer at Al Masraf, said the positive results provide clear evidence of effectiveness of our business model and is a testament to the efforts and the concerted work carried out in dealing with the challenges imposed by the Covid-19 pandemic.

“We look forward to the future and are continuously developing and improving our business model and activities in line with our customer base and sustainable growth strategy,” he said.

Fitch Ratings (Fitch), a global leading credit rating agency, has assigned Al Masraf a long-term issuer default rating of ‘A’ with a stable outlook and a short-term IDR of ‘F1’.

— muzaffarrizvi@khaleejtimes.com

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