Leading UAE bank Mashreq said its net profit for the first nine months surged 28.3 per cent to hit Dh970 million ($264 million) compared to Dh756 million during the same period last year.

Announcing the results, the Emirati lender said during the period its loans and advances grew 7.5 per cent to reach Dh40.5 billion as of September 2012, compared to Dh37.7 billion last year. Its operating income for the 9 months stood at Dh2.93 billion, it added.
 
Mashreq said it continued to rationalize its liability structure by shedding high cost deposits, leading to a 4.1 per cent reduction in Customer Deposits as compared to December 2011, reaching Dh43.5 billion.

As per the bank’s balance sheet management strategy, the total assets witnessed a moderate decline of 3.6 per cent, reaching Dh76.4 billion compared to Dh79.2 billion last year.

Liquid assets to total assets stood at 27 per cent with cash and due from banks at Dh20.4 billion as of September 2012.
 
The bank’s growth in loans along with shedding of high cost deposits moved its loan-to-deposit ratio from 83 per cent at the end of December 2011 to 93 per cent in September 2012.

Mashreq’s provisions for loans and advances continued to decrease and for the first 9 months of the year reached Dh533 million, down 37 per cent when compared to last year.

The bank’s efficiency ratio stood at 46.4 per cent at the end of September 2012, it added.
 
The bank’s capital adequacy increased to 23.05 per cent compared to 22.64 per cent as of December 2011 while its Tier 1 capital ratio stood at a healthy 17 per cent as of September 2012.

Mashreq CEO Abdul Aziz Al Ghurair described the results as ‘promising.’ "The last two quarters in particular have shown very promising trends which have culminated in a healthy bottom line growth."

"We are witnessing increasing stability in the UAE and look forward to continuing this positive growth in the coming quarters," he noted.

Al Ghurair said the bank was cautiously optimistic, and would continue to build on the positive performance while ensuring that it follows the long-term strategy of sustainable growth in the coming period.

The total operating income for the bank during the period under review was Dh2.9 billion, representing a slight 1.6 per cent drop relative to the same period last year, said the bank chief.

However on a quarterly basis, the third quarter saw operating income increase by 26.5 per cent over last year to reach Dh1 billion. Similarly, the bank's net interest income for the third quarter witnessed an increase of 12.5 per cent over last year.

Mashreq’s best-in-class net fee, commission and other income to operating income ratio remained high at 52.1 per cent, led by a 9.85 per cent growth in net fee and commission income and a 66.14 per cent growth in investment income during first 9 months of this year as compared to the same period in 2011, he added.-TradeArabia News Service