Mashreq, one of the leading financial institutions in the region, announced 16.8% growth in profitability for the first nine months of 2011, which amounted to Dh 756 million compared to Dh 647 million for the same period last year, on operating income of Dh 3 billion.
In the first nine-months of the year, Mashreq’s total assets witnessed a moderate decline of 5.8%, reaching Dh 79.9 billion compared to Dh84.8 billion at the end of 2010, which was as per the balance sheet management strategy of the bank. Loans and Advances reported at Dh 38 billion decreased 7.8% from Dh 41.2 billion at the end of 2010. Liquid assets to total assets reported 32% with Cash and due from banks at Dh25.8 billion as of September 2011.
Mashreq provisions for loans and advances continued to decrease by 30% to Dh 846.7 million for the first nine months of 2011 from Dh 1.208 billion for the same period in 2010. The efficiency ratio remained healthy at 43.9%%.
In view of the high liquidity, the bank has rationalized its liability structure by shedding some high-cost deposits, leading to a 14.9% reduction in customer deposits compared to December 2010, to reach Dh43.6 billion. However Mashreq has continued to maintain very healthy Loans to deposit ratio which stood at 87% as of September 2011.
The bank’s capital adequacy further increased to 23.3% representing a 0.6% rise from December 2010 levels, while tier 1 capital ratio has also improved by a similar rise to 16.5% over the same period.
“We are pleased to announce another profitable quarter for Mashreq. Our balance sheet for the quarter and indeed the whole year through to September is reflective of our continued efforts towards offering the very best in banking services in the region and serves as a testament to the success of this strategy,” Abdul Aziz Al Ghurair, CEO of Mashreq said.
“We have witnessed stability in the UAE Banking industry, which has reflected in the performance of banks. This is a period of healthy recovery and is a great opportunity to record reasonable growth in the next quarters”, Al Ghurair added.
Total income for the bank during the first nine months of 2011 was Dh2.986 billion, representing a 7.7% reduction relative to the same period in 2010. Net Interest Income for the first three quarters of this year was down 15.2% compared to same period last year. However, fee and other income to gross income ratio reported 50.5% which is one of the best in its class.
Costs for Mashreq in the first nine months of 2011 remained stable at Dh1.311 billion.
Earnings per Share for the publicly listed bank for the first three quarters of 2011 are up 16.8%, at Dh 4.47, relative to the Dh3.83 for the same period of 2010.