x Abu Dhabi, UAEThursday 27 July 2017

Mashreq sees profit rise as chief tips comeback in banking sector

Mashreq reported a rise in net profit of 60 per cent for last year as the lender's chief executive tipped the banking sector for a strong comeback.

Mashreq reported a rise in net profit of 60 per cent for last year as the lender's chief executive tipped the banking sector for a strong comeback.

The bank's profits reached Dh1.3 billion (US$354 million) last year as income from fees, commission and investment all jumped. Net fees and commission income rose 20.8 per cent, while profits from investment climbed by 131.6 per cent.

Operating income for the fourth quarter reached Dh1.1bn, up 29.4 per cent from the same period a year earlier.

The bank did not provide a figure for fourth quarter net profit.

"Mashreq has made an impressive showing on all the essential performance parameters - operating income, net profit and in the reduction of provisions," said Abdul Aziz Al Ghurair, the chief executive.

Mashreq is the latest bank to report strong earnings in recent days. Emirates NBD on Thursday reported profits of Dh625m during the fourth quarter, more than quadruple that of the corresponding period a year earlier. National Bank of Abu Dhabi also beat earnings estimates with fourth quarter profits of Dh1.1bn, a rise of more than half from the year earlier.

The results suggest troubles caused by a build-up of non-performing loans after the global financial crisis may be fading as the domestic economy improves and the property market recovers.

"I believe that the UAE banking industry is poised for a strong comeback from the rough patch that it passed through in the recent past," said Mr Al Ghurair, who is also chairman of Emirates Banks Association.

Mashreq's loans and advances grew by 9.9 per cent during last year to reach Dh41.4bn. The bank's provisions for bad loans dropped by 31 per cent to Dh826m.

tarnold@thenational.ae