Mashreq posts $653m net profit in 2015

07/02/2016 08:24 AST

Mashreq, one of the leading financial institutions in the UAE, said it has maintained a steady performance in 2015 amid difficult market conditions with a solid net profit of Dh2.4 billion ($653 million) over the previous year.

Announcing the financial results for the year ending December 31, the UAE lender said its earnings per share too remained strong at Dh13.53 ($3.68) as of December 2015.

The bank's total operating income was Dh6 billion, a year-on-year increase of 2.3 per cent compared to the operating income of Dh5.8 billion in 2014.

Mashreq said the net interest income witnessed a 7.3 per cent growth at Dh3.3 billion compared to 2014, driven by nine per cent year-on-year increase in average loan volume. However, there has been a slight decline in net interest margin from 3.2 per cent as of December 2014 to 3.1 per cent for the same period last year.

On a quarterly basis, the net interest income has moderately decreased by 1.6 per cent to Dh813 million in the fourth quarter of 2015 as compared to Dh826 million in the third quarter of 2015, said the Dubai-based lender.

The net fee and commission increased slightly by 0.9 per cent year-on-year to reach Dh1.7 billion. This represented 63.5 per cent of total non-interest income in 2015 as compared to 60.9 per cent the year before.

Commenting on the performance, CEO Abdul Aziz Al Ghurair said: "Mashreq has maintained a steady performance in the difficult market conditions, proving once again that being prepared is half the battle won. As many others in the industry, we read the signs of the market softening early and took decisions to moderate our growth strategy accordingly."

"As a result, the year has delivered stable financial results for the year ending December 2015, reporting a net profit of Dh2.4 billion and earnings per share of Dh13.53. I believe this is remarkable when you consider how rapidly the market sentiments deteriorated in the last two quarters of the year, influenced by the tumbling price of oil that has had strong impact on all the GCC economies," noted Al Ghurair.

"When viewed against the fact that this has been accompanied by the intrinsic improvement in our business where Mashreq continues to have the best in class net fee, commission, investment and other income at 45 per cent of our operating income, a strong balance sheet growth and a robust 81.7 per cent loan-to- deposit ratio, we feel very prepared to face the challenges of the new year," he stated.

Moreover, he said, the banks' non performing loans' ratio has declined to 2.8 per cent with a confidence inspiring NPL coverage of 145 per cent.

"Now more than ever, we need to be creative in our approach to serving our customers even better, faster and in innovative ways so that we continue on our strategic path to achieve our long term goals," remarked Al Ghurair.

"The fact is that we are passing through a period of great economic change in the world, and I believe that we must proceed with determination to focus on the essentials to make banking smoother and friction free for our clients and customers" he added.-

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