Posted on April 20, 2015

Mashreq, one of the leading financial institutions in the region, today reported its financial results for the first quarter ended 31st March 2015.

Key highlights [Q1 2015 vs Q1 2014]:

  • Stable growth in Operating Income and Net Profit
    • Net profit increased by 13.2% year-on-year to AED 651 million
    • Operating Income up 8.0% year-on-year to AED 1.5 billion driven by strong growth in Net Interest Income
    • Net Interest Income up by 17.2% year-on-year, driven by 6.4% year-on-year increase in loan volume and improvement in net interest margin
  • Consistently high proportion of net fee and commission income
    • Mashreq’s best-in-class Net Fee, Commission and Other Income to operating income ratio remained high at 46.1%
    • Other Income grew by 12.1% year-on-year
  • Strong balance sheet
    • Total Assets increased marginally by 1.0% to AED 106.9 billion while Loans and Advances decreased slightly by 2.4% to AED 56.7 billion as compared to December 2014
    • Customer Deposits increased by 3.9% to reach AED 71.2 billion as compared December 2014
    • Loan-to-Deposit ratio remained robust at 79.6% at the end of March 2015
  • Healthy liquidity and capital position
    • Liquid Assets to Total Assets stood at 29.0% with Cash and Due from Banks at AED 31.1 billion
    • Capital adequacy ratio and Tier 1 capital ratio continue to be significantly higher than the regulatory limit and stood at 16.2% and 15.0% respectively
  • Sustained asset quality
    • Non-Performing Loans to Gross Loans ratio remained stable at 3.7% at the end of March 2015
    • Total Provisions for Loans and advances reached AED 3.40 billion, constituting 131.0% coverage for Non-Performing Loans

Mashreq delivered strong financial results for the quarter ending March 2015, reporting a net profit of AED 651 million, an increase of 13.2% as compared to March 2014. Earnings per share strengthened to AED 3.67 at the end of March 2015 compared to AED 3.40 a year earlier.

Mashreq's CEO, H.E. AbdulAziz Al Ghurair (pictured), said: “Our first quarter financial results truly demonstrate a continued momentum across all of our banking divisions. Our results reflect the continued stability of the UAE economy in the face of the disruption in the Oil market. The banking industry and Mashreq in particular has displayed a remarkable immunity to the resultant economic turmoil in the region. I am pleased to announce a solid quarterly performance to begin the year, with an increase in the Net Profit of 13% and an Operating Income of AED 1.5 billion driven by strong growth in Net Interest Income, which went up by a substantive 17.2% year-on-year. We continue to benefit from an ongoing strong balance sheet, stable earnings and healthy liquidity. The importance of these fundamentals cannot be overstated. They enable us to put substantial resources into innovating and perfecting the market-leading products which our name is now synonymous with.”

Al Ghurair continued, “Looking to the wider economy, the rest of 2015 will present opportunities for Mashreq as it continues to position itself as a Regional leader. We believe that it is those that are committed to innovation, excellence and delivering a superior customer experience that will return the strongest results during the rest of 2015 and beyond.”

Operating Income

  • Total operating income for Q1 2015 was AED 1.49 billion, a year-on-year increase of 8.0% compared to Q1 2014 operating income of AED 1.38 billion. On a quarterly basis, operating income reduced by 1.7% compared to Q4 2014 operating income of AED 1.52 billion.
  • Net Interest Income at AED 804 million was up by 17.2% compared to a year earlier, driven by 6.4% year-on-year increase in loan volume and 5 bps improvement in net interest margin from 3.08% in March 2014 to 3.12% in March this year. On a quarterly basis, Net Interest Income fell moderately by 1.3% as compared to AED 814 million in Q4 2014.
  • Net fee, commission and other income fell by 1.1% year-on-year to reach AED 688 million as a 2.3% fall in net fee and commission income and 31.3% drop in investment income was offset by 12.1% increase in other income. On a quarterly basis, net fee and commission income remained stable leading to a best in class non-interest income to operating income ratio of 46.1% for Q1 2015 (vs 50.4% in Q1 2014 and 46.4% in Q4 2014). Net fee and commission income represented 62.0% of total non-interest income in Q1 2015 as compared to 62.8% in Q1 2014 and 60.5% in Q4 2014.
  • Operating expenses increased by 15.3% year-on-year and 1.3% quarter-on-quarter to reach AED 605 million; Efficiency Ratio at 40.5% increased slightly as compared to 37.9% in Q1 2014 and 39.3% in Q4 2014.

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Assets and Asset quality

  • Mashreq’s Total Assets increased marginally by 1.0% to reach AED 106.9 billion in Q1 2015, compared to AED 105.8 billion at the end of 2014. Loans and Advances decreased slightly by 2.4% during the first three months of 2015 to reach AED 56.7 billion, compared to AED 58.0 billion at the end of December 2014 predominantly led by a 2.7% fall in conventional loans. On a year-on-year basis, Loans and Advances grew by 6.4% driven by 7.2% growth in conventional loans. Liquid Assets to Total Assets stood at 29.0% with Cash and Due from Banks at AED 31.1 billion at the end of the first quarter. Loan-to-Total Assets Ratio at 53.0% fell slightly as compared to 54.8% at the end of 2014.
  • Customer Deposits at AED 71.2 billion, increased by 3.9% as compared to December 2014, driven by 12.6% growth in Islamic deposits and 3.2% growth in conventional deposits. Loan-to-Deposit ratio stood at 79.6% vs. 84.8% in December 2014. On a year-on-year basis, customer deposits grew by 15.0% from AED 61.9 billion in March 2014 driven by both conventional and Islamic deposits.
  • Non-Performing Loans remained stable at AED 2.7 billion in March 2015 leading a Non-Performing Loans to Gross Loans ratio of 3.7% at the end of March 2015. Net Allowances for impairment for Q1 2015 was AED 196 million as compared to AED 251 million in Q1 2014 and AED 215 million in Q4 2014. Total Provisions for Loans and advances reached AED 3.40 billion, constituting 131.0% coverage for Non-Performing Loans as on March 31, 2015.

Capital and Liquidity

  • Mashreq’s Capital adequacy ratio stood at 16.2% (regulatory minimum of 12%) as at 31 March 2015 compared to 16.6% as at 31 December 2014. Tier 1 capital ratio at 15.0% continues to be significantly higher than the 8% regulatory minimum stipulated by the UAE Central Bank (15.3% as at 31 December 2014)

Operational Updates:

In Q1 2015, Mashreq Qatar continued to progress on its mission to provide all its customer segments with the most rewarding banking relationships.

Wealth Management Solutions:

Mashreq Qatar continued to remain the leading wealth management bank in the country, with a dedicated team of Relationship Managers, all of whom are certified by the Institute of Securities & Investments, UK.  Mashreq Gold launched innovative investment & insurance products for its customers including products like “Deposit Plus” – a bundled offering for our customers who want higher returns on their normal fixed deposit and at the same time want to avail investment products to grow their wealth.

Business Banking:

The Bank became the Region’s financial institution to introduce a fully parameterized business overdraft product.  This is a unique product that allows businesses borrow up to QAR 500,000 within minimal documentation, without having to provide audited financial statements or other income documents.  Mashreq also continued to grow the portfolio of their Business Banking Platinum Credit Card, which is the only business credit card in Qatar that offers businesses to apply for up to 99 cards to manage their business expenses. Mashreq Qatar also started offering its customers with best-in-class foreign exchange solutions that provide them the best rates in the market.

Personal Banking:

Mashreq Qatar continued to improve upon their personal loan bundle by launching Majestic IV, which provides customers with guaranteed free gifts, including an iPad Air, when they choose to borrow from Mashreq.  The Bank introduced “Insta Protect Plus” – an improved product offered by partner insurance company. Qatar enhanced the savings proposition by introducing “Sweep Current Account” – a unique current account where funds up to a certain threshold get automatically transferred to a saving account to earn interest. In case any cheque comes and funds are not available, the system automatically recovers funds from the savings account to honor the cheque.

Keeping in mind with the need of customers to travel to their home country, Mashreq has partnered with Gulf Air to offer a 10% discount on every ticket purchased using Mashreq’s Platinum credit card. The bank continued to expand their discount offering by increasing the number of discount partners on their Platinum Elite Credit Card to 140 and introduced a 0% shopping plan with Sharaf DG, one of the leading electronics retailers in the region.  (ensure to include this only if the Gulf Air announcement will be made before the 19th April).

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Customer Service & Electronic Channels

In 2015, Mashreq’s mobile application SNAPP was upgraded, offering customers free International & Domestic money transfers, Kahramaa & Ooredoo Bill payments and many more features. Mashreq’s Net Promoter Score crossed 25%, which means that customers are strongly referring Mashreq as a preferred banking partner to their friends, relatives and colleagues. 


Mashreq recently arranged for their 6th annual blood donation drive in partnership with Hamad Medical Corporation. A big group of staff participated to donate blood at the event, including staff of neighboring employers.

Corporate Banking

Mashreq Qatar Corporate Banking continues to strive for excellence in Origination, Innovation and efficiency of Execution, in order to give our Corporate client base the best possible solutions in Trade Finance, Commercial Real Estate solutions, Corporate Finance, Contractor Financing, Treasury Risk Management and Transaction Banking .

The strengths of Mashreq’s dedicated team, innovative corporate finance solutions and efficient execution have been recognized by the Industry and the awards of “Best Corporate Bank Qatar 2015 & 2014” (Global Banking and Finance Review), “Best Commercial Bank Qatar 2014” (World Finance) and “Best Customer Service Bank Qatar 2014” (Global Banking and Finance Review) are testament to the journey. The award recognizes Mashreq’s role as lead bank for some of Qatar’s biggest capital projects such as Qatar Rail, road, drainage and reservoir projects, as well our pioneering approach to Book running and Syndicated Transactions, Commodity Risk Management Solutions which include Copper, Gold and Oil risk management. Thought leadership coupled with a solution centric approach have been Mashreq’s strengths as it continues on a growth trajectory for 2015

2015 Awards

Mashreq won the Best Retail Bank Qatar award,  Best Customer Service Bank Qatar as well as Best Corporate Bank Qatar as judged by Global Banking & Finance Review for 2015. 

2015 First Quarter Awards:

Global Banking & Finance Review Awards 2015

  • Best Corporate Bank Qatar 2015
  • Best Retail Bank Qatar 2015
  • Best Customer Service Bank Qatar 2015
  • Best Retail Bank UAE 2015
  • Most Innovative Banking Initiative (imashreq) UAE 2015
  • Innovative Islamic Banking Solutions Provider UAE 2015

Arab Organization for Social Responsibility Award

  • Corporate Social Responsibility Award

Banker Middle East Product Awards 2015

  • Best Premium Banking Service
  • Best Mobile Banking Service
  • Best Real Estate Advisory
  • Best Self Employed Finance
  • Best Debit Card
  • Best SME Exchange Service

Global Finance

  • Best Regional Debt Bank in the Middle East 2015
  • Best Investment Bank in the UAE 2015

MENA Fund Manager Awards

  • Best Fixed Income fund in a 3 year category
  • Sharia’h Compliant Fixed Income fund of the year

Super brands 2015

Global Finance magazine

  • Best Debt Bank in the Middle East 2015
  • Best Investment Bank in the UAE 2015