Mashreq reports 22% increase in net profit for the 1st half of 2011
26 July 2011
Dubai - UAE, 26th July 2011: Mashreq, one of the UAE’s leading financial institutions reported a 22% increase in its net profit for the first half of 2011 to AED 551.6 million compared to AED 453 million for the same period in 2010, on operating income AED 2.2 billion.
Mashreq’s continuous efforts on strategic repositioning of its balance sheet led to the decline in provisions for loan losses by 29% to AED 637 million. The efficiency ratio remained healthy at 42%.
In its 1st half year results, Mashreq’s total assets reported AED 85 billion compared to AED 84.8 billion as at 31st Dec. 2010. Percentage of Liquid assets increased to 37% with Cash and due from banks at AED 31 billion. Total customer deposits including Islamic deposits stood at AED 52 billion, reporting an increase compared to AED 51.2 billion at the end of 2010.
H.E. Abdul Aziz Al Ghurair, CEO of Mashreq commented on the financial results, “Mashreq has delivered a robust performance during the first six months of the year. This highlights our strategy and commitment towards the banking industry in the UAE and the region.”
Al Ghurair added, ”We continue to invest in people, technology, and upgrading of our products and services to seize opportunities as various markets witnessed slow but steady recovery.”
Net interest income and income from Islamic products, net of distribution to depositors decreased by 11.6% to AED 1.035 billion. Net fee commission and other income decreased by 12% reporting AED 556 million, against AED 633 million for the same period last year. However, fee and other income to gross income ratio at 52% is one of the best in its class.
Maintaining a cautious approach towards liquidity management, credit expansion and capital management, Mashreq strengthened its balance sheet with strong capital adequacy, high liquidity and low advances to deposits ratio. The capital adequacy ratio remained strong at 22.59% with its tier one ratio at 15.92%. The advances to deposit ratio is healthy at 73%.
Operational update - Mashreq Egypt
During the half yearly performance, Mashreq Egypt continued to strategically support and expand its retail activities. Mashreq Egypt announced its partnership with Chrysler to offer customers the chance to purchase Chrysler vehicles through the Mashreq Egypt Auto-Loans program at uncompetitive rates.
In its continuous efforts to support the SME growth in Egypt, Mashreq Egypt participated and sponsored the Junior Egyptian Businessmen Association SME event which brought together a remarkable number of young entrepreneurs and Egyptian businessmen.
Moreover, in consideration and understanding of the political and economic developments in Egypt, Mashreq Egypt also deferred the January installments for all its customers.