Posted on July 24, 2014

Mashreq, one of the UAE’s leading financial institutions, has reported a 40% increase in Net Profit for the first half of 2014, climbing to AED 1.16 billion as compared to AED 828 million in the first half of 2013. Continuing on the growth momentum witnessed in the first quarter of 2014, the Net Profit in the second quarter reached AED 585 million, an increase of 45% from last year.

The bank's Total Operating Income for the first half of 2014 grew to AED 2.9 billion, an increase of 26.4% 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 June 2014 was up by 38.1% compared to a year earlier, driven by 11.0% year-on-year increase in loan volume and 33 bps improvement in net interest margin from 2.7% in June 2013 to 3.0% this year, which was predominantly led by change in balance sheet structure and composition of loans.

Mashreq’s best-in-class Net Fee, Commission and Other Income to operating income ratio remained high at 49.5% led by a 25.7% growth in Net Fee and Commission Income and 30.4% growth in Net Investment Income over first half of last year. General and Administrative Expenses for the period increased by 5.4% compared to a year earlier to reach AED 1.1 billion; However Mashreq's Efficiency Ratio improved by 7.4% on a year-on-year basis to reach 37.2% at the end of June 2014.

Earnings per share strengthened to AED 6.86 at the end of June this year compared to AED 4.90 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 June 2014. Mashreq's Allowances for impairment, net, for H1 2014, was AED 556 million, and Total Provisions for Loans and advances reached AED 3.6 billion, constituting 105% coverage for Non Performing Loans as on June 30, 2014. Mashreq’s capital adequacy ratio and tier 1 capital ratio continue to be higher than the regulatory limit and stood at 16.1% and 14.7% respectively, at the end of June 2014. 

Mashreq's CEO, H.E. AbdulAziz Al Ghurair (pitured), said: “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. This performance has been made possible by putting our long held philosophy of customer-centricity to work, allowing people to recognize that we are more than just a bank, we are a financial partner, providing them with the banking solutions they need for all aspects of their lives.”

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He continued, “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.”

Mashreq’s Total Assets increased by 15.9% to reach AED 103.9 billion in June 2014, compared to AED 89.7 billion at the end of 2013. Liquid Assets to Total Assets stood at 29% with Cash and Due from Banks at AED 30.5 billion at the end of the first six months.

Loans and Advances grew by 11.0% during the first half of 2014 to reach AED 56.0 billion, compared to AED 50.4 billion at the end of December 2013. Customer Deposits increased by 20.7%, during the same period, to stand at AED 70.6 billion at the end of June 2014. The Bank's Loan-to-Deposit and Loan-to-Total Assets Ratio stood at 79% and 54% respectively at the end of June 2014.

Operational update:

In 2014, Mashreq Qatar became the first bank in the country to offer Salaam reward points – a loyalty program based not on just credit card purchases, but on the customer’s entire banking relationship. Customers can now earn points when they make a deposit, obtain a loan, or spend on their credit card! Salaam rewards can be instantly redeemed through mobile/online banking at leading outlets in Qatar including Sharaf DG, Homes R Us, Dnata Travels and many more. Mashreq also become the first bank in the region to introduce a process where customers can apply for ALL banking products using just a 1 page application form. Mashreq also launched innovative deposit products: Advance Fixed Deposits in which the entire interest is paid to the customer upfront, Step Up Savings account offering high interest rates as the customer’s balance increases, secured overdraft against investment products like Certificates of Deposits, mutual funds, and reverse convertibles. The bank also introduced Mashreq Privileges, the largest card discount program in Qatar, offering discounts at over 75 outlets in Qatar. Mashreq Qatar improved it’s priority banking offering by introducing Platinum debit cards with a host of 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 also utilized it’s regional network to offer Mashreq Flavours to customers, where they can enjoy discounts at over 750 outlets across the UAE.  The bank also launched the Triple Salaam points promotion in the summer to make Ramadan shopping and international travel more rewarding for our customers.

Awards:

Mashreq was recently awarded by Global Finance the award for the “Best Consumer Internet Bank in Qatar” for the fifth year in a row. In addition Mashreq has also been recognized as the “Best Regional Retail Bank” by Banker Middle East Industry Awards 2013. 

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