x Abu Dhabi, UAETuesday 25 July 2017

Mashreq lending reaps benefits

Mashreq lent more during the second quarter than during any full-year period since 2008 as the Dubai economy recovered.

Mashreq's strong performance was driven by a significant growth in new lending. Andrew Henderson / The National
Mashreq's strong performance was driven by a significant growth in new lending. Andrew Henderson / The National

Mashreq lent more during the second quarter than during any full-year period since 2008 as the Dubai economy recovered.

The bank, which is controlled by Dubai's Al Ghurair family, reported net profits for the second quarter of Dh402.5 million, an increase of 25.6 per cent compared with the corresponding period a year earlier.

The bank's performance was driven by a significant growth in new lending, said Abdul Aziz Al Ghurair, Mashreq's chief executive. He added that the increase in loans would drive profits during the year ahead.

"The UAE economy has clearly stabilised and this is reflected in the strong results reported for the first half by the top banks in the country," he said.

"We are pleased that the half-yearly results are built on a solid performance by all parts of our bank - corporate, retail and the international divisions have performed exceptionally. After the deleveraging of the past two, three years, we are also pleased to report that our advances have grown handsomely."

The bank missed profit estimates of Dh444m from Arqaam Capital. The bank's net loans and advances grew by 10.9 per cent during the quarter to Dh47.4 billion.

The quarter has seen lending growth at the UAE's biggest lenders hit multi-year highs.

Lending to government, the transport and manufacturing sectors and loans for personal consumption were the fastest growing parts of banks' balance sheets in the early months of this year, said Giyas Gokkent, the chief economist at the National Bank of Abu Dhabi, citing Central Bank data.

Companies were able to borrow with interest rates at historic lows and banks were once again willing to lend, he added. "Whichever way you look at it, historically these are very very good rates to borrow at," Mr Gokkent said.

"Because of the pickup in economic activity and because within the context of the Abu Dhabi 2030 plan … we'll tend to see lending growth pick up."

 

ghunter@thenational.ae