Abu Dhabi Islamic Bank posts lower-than-expected 2.2% profit
Mashreq bank posts 9.5% increase in first quarter net profit, missing estimates
Dubai-based lender Mashreq posted a 9.5 per cent increase in first quarter net profit, missing analysts’ estimates, as expenses rose and fees and commissions income declined.
Net profit in the three months to the end of March rose to Dh598 million from Dh546m in the year-earlier period, the bank said on Monday.
Two analysts polled by Bloomberg had forecast a mean net profit of Dh623.5m.
Total operating income rose 4 per cent to Dh1.52 billion compared with Dh1.46bn a year earlier.
Operating expenses increased 4 per cent to Dh592m from Dh569m, while fees and commissions income dipped 5.2 per cent to Dh357m from Dh376m.
“Our solid financial performance puts us at the forefront of the banking industry not only locally, but also regionally, and I am confident we will be able capitalise on upcoming opportunities and maintain our momentum for the remainder of 2018,” said Abdulaziz Al Ghurair, the bank’s chief executive.
Banks in the UAE and wider Arabian Gulf region have suffered in past years from lower income due to the economic slowdown caused by the oil price slump.
Lending to small and medium-sized enterprises that defaulted also dented profitability and prompted banks to become more conservative in lending.
Meanwhile, Abu Dhabi Islamic Bank, the emirate’s biggest listed Sharia-compliant lender, posted a 2.2 per cent increase in first quarter net profit, missing estimates, as revenue declined because of its conservative lending policy.
Net profit in the three months to the end of March rose to Dh590.4m compared with Dh577.5m a year earlier, it said in a statement. Three analysts polled by Bloomberg had forecast an average net profit of Dh593.3m.
Total revenue decreased 0.7 per cent to Dh1.36bn from Dh1.37bn. Customer financing fell 1.7 per cent to Dh77.3bn from Dh76bn.
“Despite operating in the region’s most competitive banking environment, we believe ADIB is well positioned to take advantage of the UAE’s economic development and diversification, ensuring that our financial strength and focus on innovation delivers a compelling offering to customers,” said Khamis Buharoon, ADIB vice-chairman and acting chief executive officer.
“We cannot ignore that global economic uncertainties remain, and that there are concerns about the pressures of a rising rate environment on major segments of the UAE economy. We will therefore maintain our conservative approach to balancing the risk and reward of new credit extension.”