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Mashreq posts 35pc rise in profit

Dubai, May 1, 2014

Dubai's Mashreq, the emirate's third-biggest lender by assets, reported a 35 percent increase in first-quarter net profit on rising income thanks to improving economic conditions.

The lender made a net profit of 575 million dirhams ($156.6 million) in the opening three months of 2014, it said in a statement, up from 425 million dirhams in the same period last year.

This was slightly better than Arqaam Capital's forecast for a net profit of 549 million dirhams.

The result maintained the the trend of rising profits for UAE banks in the first-quarter, benefiting from the local economy's recovery after a real estate crash and debt problems at Dubai government-linked entities.

Dubai's tourism, transport and logistics sectors are booming along with a stock market up 50 percent since the turn of the year and real estate prices up 33 percent in the past 12 months.

Mashreq's net interest income jumped 41 percent year on year, driven by higher lending and improvement in its net interest margin from changes to its balance sheet structure and the type of loans it held.

Loans and advances during the first three months of the year jumped 5.6 percent to 53.3 billion dirhams, from 50.4 billion dirhams at the end of December.

Non-interest income also climbed significantly, helped by 33.3 percent growth in net fee and commission income and a 28.3 percent increase in net investment income.

The high growth in income offset a 47 percent rise in impairments, which climbed to 251 million dirhams.

Mashreq said in February that it was increasing the percentage of the bank's shares that foreign investors could own to 49 percent ahead of the upgrade of UAE markets to emerging market status by index compiler MSCI.

However, with the Al-Ghurair family currently owning more than 70 percent of the bank, the change is unlikely to have a major impact in the short term.  - Reuters




Tags: Dubai | Mashreq | lender |

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