Abu Dhabi, UAEWednesday 22 May 2019

Dubai's Mashreq posts slight rise in full-year profit

The lender said total assets increased about 12 per cent last year

Mashreq bank's first quarter net income climbed as the lender provisions for bad loans declined. Reuters
Mashreq bank's first quarter net income climbed as the lender provisions for bad loans declined. Reuters

Mashreq, one of Dubai's oldest lenders that is controlled by the Al Ghurair family, reported an annual 0.4 per cent rise in full-year 2018 net profit as impairment charges fell.

Net profit for the 12-months to the end of December 2018 increased to Dh2.1 billion, the lender said in a statement on Monday. Total assets grew by about 12 per cent to Dh139.9bn, while loans and advances increased by 10.4 per cent to Dh69.3bn.

"2018 was a difficult year due to market fluctuations, however we rose to the challenge and managed to sustain our revenues," said Abdul Aziz Al Ghurair, the Mashreq chief executive. "Much of this can be attributed to the bank’s focus on strategically acquiring good assets and growing the loan portfolio, whilst increasing its funding base."

Improved risk management helped the lender reduce its allowance for impairments by 17.3 per cent and the bank's strong liquidity and capital position enabled it to capitalise on future growth opportunities, Mr Ghurair said.

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Customer deposits grew by 9.4 per cent in the year to reach Dh83.2bn while the loan-to-deposit ratio remained "robust "at 83.2 per cent at the end of December 2018, the bank said.

The lender said fourth quarter net profit declined 19.5 per cent to Dh312 million from the same period a year earlier.

Lenders in the six-member economic block of GCC, have struggled to maintain profitability in the fast few years as the economic momentum slowed on the back of three-year oil slump that began in the middle of 2014, pushing the crude prices to as low as below $30 per barrel in the first quarter of 2016. However, oil prices have since recovered, currently hovering around $60 per barrel mark and the economic activity has picked up, boosting credit demand from lenders.

Updated: January 21, 2019 07:35 PM

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