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 AED 756 million compared to AED 647 million for the same period last year, on operating income of AED 3 billion.
In the first nine-months of the year, Mashreq’s total assets witnessed a moderate decline of 5.8%, reaching AED 79.9 billion compared to AED 84.8 billion at the end of 2010, which was as per the balance sheet management strategy of the bank. Loans & Advances reported at AED 38 billion decreased 7.8% from AED 41.2 billion at the end of 2010. Liquid assets to total assets reported 32% with Cash and due from banks at AED 25.8 billion as of September 2011.
Mashreq provisions for loans & advances continued to decrease by 30% to AED 846.7 million for the first nine months of 2011 from AED 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 AED 43.6 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.
Commenting on the latest financial results, H.E. Abdul Aziz Al Ghurair, CEO of Mashreq said: “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.”
“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 AED 2.986 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 AED 1.311 billion.
Earnings per Share for the publicly listed bank for the first three quarters of 2011 are up 16.8%, at AED 4.47, relative to the AED 3.83 for the same period of 2010.