Mashreq, one of the UAE’s leading financial institutions, has reported a 35% increase in its Net Profit for the first nine months of 2014, climbing to AED 1.76 billion compared to AED 1.30 billion at the end of September 2013. The bank's Total Operating Income for the period grew to AED 4.3 billion, an increase of 24% compared to a year earlier, driven by both Net Interest Income and Net fee and commission income.
The bank's Net Interest Income at the end of September 2014 was up by 33% compared to a year earlier, driven by 18% year-on-year increase in loan volume and 27 bps improvement in net interest margin from 2.91% in September 2013 to 3.18% this year, which was predominantly a function of a change in balance sheet structure. Mashreq’s best-in-class Net Fee, Commission and Other Income to operating income ratio remained high at 48.6% led by 18% growth in Net Fee and Commission Income and 38% growth in Investment Income as compared to September 2013.
General and Administrative Expenses for the period increased by 7% compared to a year earlier to reach AED 1.6 billion; however Mashreq's Efficiency Ratio improved from 43% in September 2013 to reach 37.3% at the end of September 2014. Earnings per share strengthened to AED 10.39 at the end of September this year compared to AED 7.70 a year earlier. Asset quality continued to improve as Non Performing Loans to Gross Loans ratio reduced from 6.0% in December 2013 to 5.7% at the end of September 2014. Mashreq's Provisions for Loans & Advances, for the nine months, stood at AED 860 million, and Total Provisions for Loans & Advances reached AED 3.84 billion, constituting 110% coverage for Non Performing Loans as on September 30, 2014.
Mashreq’s Capital Adequacy ratio and Tier 1 capital ratio continue to be significantly higher than the regulatory limit and stood at 16.4% and 14.9% respectively, at the end of September 2014.
Mashreq's CEO, H.E. AbdulAziz Al Ghurair, said: “The Bank continues to deliver exceptional results for the first nine months of the year with an increase of 35% in net profits. All the Bank’s businesses are doing exceptionally well, with each division delivering stellar returns. Our customer-centric financial services never fail to delight our customers. Customers in the UAE demand innovation, they demand new ideas, new ways that suit their latent needs and Mashreq remains in the forefront by leading this new wave.”
He continued, “While the banking industry in the UAE remains a crowded and competitive arena, there are huge opportunities too. The World Economic Forum’s annual Global Competitiveness Index recently showed that the UAE Economy is the highest rated in the Arab world, ranking it 12th out of 144 countries. This is further evidence of the strength of the economic recovery that we are witnessing and the shape of things to come in the near term and spelling a bright future for the banking sector as a whole.”
In its third quarter results statement, Mashreq’s Total Assets increased by 14% to reach AED 102.3 billion, compared to AED 89.7 billion at the end of 2013. Liquid Assets to Total Assets stood at 26% with Cash and Due from Banks at AED 26.8 billion at the end of the third quarter. Loans & Advances grew by 14% during the first nine months to reach AED 57.3 billion, compared to AED 50.4 billion at the end of December 2013. Customer Deposits also increased by 14%, during the same period, to stand at AED 66.8 billion at the end of September 2014.
The Bank's Loan-to-Deposit ratio and Loan-to-Asset ratio remained the same as of December 2013 - 86% and 56% respectively.
Operational update: After a strong H1, Mashreq Qatar continues to provide customers with the most rewarding banking experiences: Mashreq Qatar became the first bank in Qatar to offer Salaam reward points, which offers a loyalty program based on the customer’s entire banking relationship, not only credit card purchases. Customers earn reward points when they make a deposit, obtain a loan, or spend on their credit card and can redeem them instantly through mobile and online banking at leading outlets in Qatar, including Sharaf DG, Homes R Us and Dnata Travels.
In 2014, Mashreq became the first bank in the region to introduce a simplified application process for ALL banking products using one page application form, which includes mandatory FATCA forms. Mashreq also launched innovative deposit products: Advance Fixed Deposits; in which the entire interest is paid upfront to the customer; Step Up Savings account, which offers high interest rates as the customer’s balance increases; and the Secured Overdraft, against investment products like Certificates of Deposits, Mutual Funds and reverse convertibles.
Mashreq successfully launched instant cash-backed credit cards against all deposit products offered by the Bank and in 2014, the bank introduced Mashreq Privileges, the largest card discount program in Qatar, offering discounts to its Platinum Elite Credit Card holders at over 100 outlets in Qatar. Mashreq Qatar improved it’s priority banking offering by introducing Platinum debit cards with lifestyle benefits including free travel insurance for Shengen countries, free Al Maha service at Hamad International airport (twice a year), free Marhaba service at Dubai International Airport (twice a year), supplementary debit cards and many more.
Mashreq improved the Majestic loan proposition by upgrading the gift to an iPad Air for customers availing a loan of QAR 300,000 and above. Mashreq Qatar utilized it’s regional network to offer Mashreq Flavours to customers, where they can benefit from discounts in over 750 hotels & restaurants across the UAE. To facilitate business banking customers, automated intimation of legal documents expiry through SMS has also been introduced. In addition, Mashreq bank offers another unique feature to ensure that the customer contact details are conveniently updated, where all customers can now update their mobile numbers instantly through any Mashreq ATM – with no need to visit any branch. The “Snapp” mobile banking platform has also been upgraded to include Windows devices (in addition to Android, Blackberry and iOS, which were already covered).
Mashreq also launched the Customer Relationship Manager (CRM) Microsoft based system that helps to enhance the customers banking experience. The new system allows customers to apply for products, request services or even talk about their experience with the bank. Mashreq has always been innovative and has become the first bank in Qatar to launch the concept of Loan Fair in Branches where customers can walk in with the required documents for instant loan approvals and disbursement the next day.
Mashreq was recently awarded by Global Finance the award for the “Best Consumer Internet Bank in Qatar” for the sixth year in a row. In addition Mashreq has also been recognized as the “Best Regional Retail Bank” by Banker Middle East Industry Awards 2013. Mashreq received three additional awards this year for “Best Commercial Bank in Qatar” in 2014 from World Finance Magazine of the UK , “Best Customer Service Bank in Qatar” in 2014 and “Best Corporate Bank in Qatar” in 2014 by Global Banking & Finance Review in the UK.