Mashreq has reported a 40 per cent increase in net profit for the first half, climbing to Dh1.16 billion ($315.8 million), compared with Dh828 million in the first half of last year.

Net profit in the second quarter reached Dh585 million, an increase of 45 per cent from last year, reported the Gulf Daily News, our sister publication.

The bank's total operating income for the first half grew to Dh2.9 billion, an increase of 26.4 per cent compared with a year earlier, driven by both net interest income and net fee and commission income.

Net interest income at the end of June was up by 38.1 per cent compared with a year earlier.

It was driven by 11 per cent year-on-year increase in loan volume and 33 bps improvement in net interest margin from 2.7 per cent in June last year to 3 per cent this year, which was predominantly led by change in balance sheet structure and composition of loans.

Mashreq's net fee, commission and other income to operating income ratio remained high at 49.5 per cent led by a 25.7 per cent growth in net fee and commission income and 30.4 per cent growth in net investment income over first half of last year.

General and administrative expenses for the period increased by 5.4 per cent compared with a year earlier to Dh1.1 billion.

However, its efficiency ratio improved by 7.4 per cent on a year-on-year basis to 37.2 per cent at the end of June.

Earnings per share strengthened to Dh6.86 compared to Dh4.90 a year earlier.

Non-performing loans to gross loans ratio reduced from 6 per cent in December last year to 5.7 per cent at the end of June.

Mashreq's allowances for impairment, net, was Dh556 million, and total provisions for loans and advances reached Dh3.6 billion, constituting 105 per cent coverage for non-performing loans as on June 30.

Mashreq's capital adequacy ratio and Tier 1 capital ratio continue to be higher than the regulatory limit and stood at 16.1 per cent and 14.7 per cent respectively, at the end of June.

"Our first half results underscore the fact that the bank is steaming ahead to a record year in a sustained manner, recording both top and bottom line growth because of equally strong performances from the corporate, retail and international divisions," Mashreq chief executive Abdul Aziz Al Ghurair said.

"Seeing how the UAE economy is picking up speed, we believe that this is the time when banks that will benefit the most will be those who are genuinely committed to putting their customers first and investing in the innovative platforms needed by the smart banking public in our market," he added.

Total assets increased by 15.9 per cent to Dh103.9 billion in June, compared with Dh 89.7 billion at the end of last year.

Liquid assets to total assets stood at 29 per cent with cash and due from banks at Dh30.5 billion at the end of the first six months.

Loans and advances grew by 11 per cent during the first half to Dh 56 billion, compared with Dh 50.4 billion at the end of December last year.

Customer deposits increased by 20.7 per cent, during the same period, to Dh70.6 billion at the end of June.

The bank's loan-to-deposit and loan-to-total assets ratio stood at 79 per cent and 54 per cent respectively at the end of June. – TradeArabia News Service