Mashreq, Dubai's third-biggest lender by assets, made a net profit of Dh596.8 million ($162.5 million) for the third quarter of the year, a rise of 26 per cent on the Dh473.2 million ($128.8 million) during the corresponding period of 2013.

Mashreq's performance was bolstered by a rise in net interest income, with profits from the segment swelling to Dh785.6 million ($213.8 million), up by 25.6 per cent from the year earlier period. This was aided by strong loan growth, with total loans up 14 per cent since the start of 2014 to Dh57.3 billion ($15.6 billion).

Net fee and commission income rose to Dh425.4 million ($115.8 million), up 5.8 percent year on year, the statement said.

The bank is one of an increasing number of local lenders looking to snap up banking stakes in other countries to diversify in the face of intense competition at home, where 51 lenders battle for market share. Mashreq is targeting Egypt and Turkey for acquisitions, Chief Executive Abdul Aziz al-Ghurair said on Sept. 17.

"While the banking industry in the UAE remains a crowded and competitive arena, there are huge opportunities too," the CEO said in Monday's statement.

Most local banks have in recent years had to raise buffers against soured loans after a spate of debt restructurings linked to a property and financial downturn, although reviving asset quality has helped lenders earnings performance in the last two years as they set aside less cash and reclassify some bad loans as performing.

Profit for the first nine months of 2014 reached Dh1.76 billion ($479 million), compared to Dh1.3 billion ($353.8 million) in the same period of 2013. – Reuters