Mashreq registers net income of Dhs1.12bn for nine months to 30th September 2009

Mashreq's growth in operating income is largely attributed to the growth in fee, commission, and other non-interest income which has grown year on year by 37%. Net, Interest income and income from Islamic financing and investment products have recorded a collective growth of 1% year on year.

Net income for the nine months to 30th September 2009 at Dhs1.12bn has declined 26% year on year in response to prudent financial management which has seen the bank increase its provisions for loans, advances, and other financial assets to Dhs1.4bn. Mashreq's earnings per share stand at Dhs6.95, a 26% reduction year on year.

Mashreq has a strong asset base with total assets standing at Dhs99.9bn, an increase of 7% as compared to 31st December 2008, largely attributed to a significantly stronger cash position.

At an operational level, Mashreq has experienced a healthy growth in deposits, with the value at 30th September 2009 standing at Dhs61bn, an increase of 19% against 31st December 2008 position. During the same period, loans and advances including Islamic financing reduced by 9.5% enabling the bank to achieve a very comfortable advances to deposit ratio of 82%. At a business level, this is reflective of Mashreq's strategy to keep this ratio at a prudent level under current market uncertainties. Consequently, Mashreq operates a highly liquid balance sheet with cash and balances with Central Bank standing at Dhs20bn, a 218% increase compared to 31st December 2008.

In addition to this strong financial position, Mashreq's cost management efforts have resulted for a year on year 1% reduction in operating expenses to Dhs1.3bn. Resultantly the Bank's expenses to income ratio improved to a healthy 34%.

As part of its strategy, Mashreq has focused efforts on ensuring that it is well capitalized with a total capital adequacy ratio of 21% and Tier-1 Capital ratio at 15%. In the current market environment, this solid capitalization adds strength to the bank's operations.

Commenting on Mashreq's financial performance for the nine months to 30th September 2009, Abdul-Aziz Al-Ghurair, CEO of Mashreq, said:

"As we move through 2009 to our full year results in December, Mashreq continues to be a very profitable financial institution and a key part of the UAE banking landscape."

Al-Ghurair added, "Whilst net profits are below those recorded for the equivalent period last year, this is largely due to our ongoing policy of prudent financial management which has seen us increase our provisions for loans, advances and other financial assets. At an operating level our income has increased, reflective of the products that we offer suiting the needs for our customers."

"We remain a well capitalized, highly liquid and profitable institution, and are well positioned to continue with our strategic growth plans as the economy develops over the coming months," he said.

Mashreq continues to build on its strength and presence throughout the UAE, having recently unveiled 4 new branches throughout Abu Dhabi and Al Ain, as part of its expansion plans in the Capital, bringing the total number of branches in the UAE to 62. It also entered into strategic partnerships with leading developers in Abu Dhabi such as Aldar, TDIC & Sorouh, to increase access to home financing for customers wishing to invest in Abu Dhabi real estate.

In order to increase convenience for retail customers, Mashreq successfully installed 11 ATMs in nine stations of phase I of the much anticipated Dubai Metro, the first national bank to do so. At a product level, the Bank recently launched the Grand Entertainment Card and the Mashreq Business Platinum Debit card for Small and Medium Enterprises (SME), the first of their kind in the UAE.