Mashreq, one of the UAE’s leading national financial institutions reported a 6% increase in its net profit in Q1 2011 to AED 265.3 million compared to AED 250.8 million for the same period in 2010, on operating income of AED 1.1 billion.
In its first quarter results statement, Mashreq also announced that its total assets remained flat at AED 84.8 billion compared with 31st Dec. 2010. Percentage of Liquid assets to Total assets remained stable at 32% with Cash and due from banks at AED 27 billion. Total customer deposits including Islamic deposits during the 1st quarter of 2011 stands at AED 50.2 billion reporting a decrease of 2% as compared to AED 51.25 billion in 31st Dec. 2010.
Net interest income and income from Islamic products, net of distribution to depositors, decreased by 5.9% to AED 558 million compared to the same period in 2010. Net fee, commission and other income stood at AED 535 million, against AED 645 million for the same period last year. However, fee and other income to gross income ratio at 49% continues to be one of the best in its class.
The Provisions for loan losses declined by 33% to AED 325.3 million, demonstrating Mashreq’s continuous efforts on improving the asset quality. As part of Mashreq’s prudent financial management expenses are under control and well arranged, with general and administrative expenses reduced by 1.9% compared to the same period in 2010.
Commenting on the financial results, H.E. Abdul Aziz Al Ghurair, CEO of Mashreq - said, “Mashreq’s outlook remains positive as the region’s economy continues to witness steady growth. The results achieved highlight our strategy to continue operating prudently and profitably. We look forward to maintain a momentum in growth in the coming period across the bank’s division, whilst ensuring that our business objectives are met.”
Al Ghurair continued, “Our strategic plan for 2011 – 2013 is to continue to operate as a leading financial institution in the UAE and the region, keeping in mind the requirements of our customers and how can we evolve. We constantly look at adapting and changing our business model to meet various market conditions.”
Maintaining a cautious approach towards liquidity management, credit expansion and capital management, Mashreq strengthened its balance sheet with strong capital adequacy, high liquidity and low advances to deposits ratio. Mashreq’s capital adequacy ratio remained strong at 22.05% with its tier one ratio at 15.44%. The advances to deposit ratio continues to be a healthy at 80%.