Dubai / Emirates Business
Mashreq, one of the leading financial institutions in the UAE, has reported its financial results for the first half ending June 30, 2017.
Net profit for the first half stood at AED 1.1 billion — a 3.0% increase YoY. Impairment allowance was down by 22.3% YoY. Mashreq’s best-in-class non-interest income to operating income ratio remained high at 41.2%, while investment income up by 52.4% year-on-year.
Mashreq’s CEO, HE AbdulAziz Al Ghurair, said: “Mashreq’s continued focus on business performance while remaining committed to our customers’ needs is evident in the financial results for the first half of 2017. Our perennial drive to deliver innovative solutions which exceed customer expectations is the reason we are able to achieve sustained performance, despite market slowdown and regional headwinds. I am pleased to report that we achieved a 3% year-
on-year increase in net profit; it stood at AED 1.1 billion for the first half of 2017.”
The total assets increased by 2.4% in the year to AED 125.8
billion whereas loans and advances increased by 2.4% to AED 62.4 billion as compared to December 2016. Customer deposits increased by 1.1% year to date to reach AED 77.9 billion. Loan-to-deposit ratio remained robust at 80.2% at the end of June 2017. Liquid assets to total assets stood at 29.7% with cash and due from banks at AED 37.3 billion.
“Our teams have worked well to build a steady pipeline of non-interest income, which represents a healthy 41% of Operating Income. Loans-to-deposits remains steady at 80%, supported by our highly liquid balance sheet and above-average Tier 1 capital. Growth in Assets and Liabilities has been modest in line with market conditions, and costs have been managed well so that we remain nimble and flexible,” said Al Ghurair.
The total operating income for H1 2017 was AED 3.0 billion, a year-on-year decrease of 5.5% compared to H1 2016 operating income of AED 3.2 billion due to a fall in non-interest income.
Net interest income and income from islamic financing remained stable at AED 1.8 billion compared to H1 2016. On a quarterly basis, it increased by 6.7% to AED 0.9 billion in Q2 2017 and led to a 19 bps increase in net interest margin from 3.34% in Q1 2017 to 3.53% in Q2 2017.
Though investment income increased by 52.4%, total non-interest income fell by 9.9% as net fee and commission decreased by 14.7% year-on-year to reach
AED 763 million. Net fee and commission income represented 61.9% of total non-interest income in H1 2017 as compared to 65.4% in H1 2016.
Operating expenses for the first half decreased by 2.4% year-on-year to reach AED 1.2 billion; Efficiency Ratio at 39.3% in H1 2017 increased slightly with respect
to the previous year (38.0% as of H1 2016).
Net profit for the quarter increased by 2.1% to AED 557 million from AED 546 million in Q1 2017 (AED 1.10 billion in H1 2017 vs AED 1.07 billion in H1 2016).