Mashreqbank reports record 131% increase in profit for 2005

Addressing a press conference to announce the results, Mashreqbank CEO Abdul Aziz Al Ghurair said that 2005 has been an exceptional year for the UAE economy and banking industry, adding that banks should be prudent and invest these earnings to strengthen their business fundamentals.

"During the year we participated in and facilitated economic activities across the full spectrum of business sectors while maintaining our cautious approach. While the bank's traditional lines of businesses recorded a significant growth, we were also able to successfully tap the emerging business opportunities in regional capital markets through our asset management and restructured brokerage operations."

The Group's Operating Income for 2005 jumped 80 per cent to reach Dh3.106 billion. The major contribution to this growth was from fee, commission and investments income.

Due to increased investments in infrastructure and branch expansion, the Group's Operating Expenses increased by 36 per cent, yet its Efficiency Ratio at 25 per cent was well within the targeted range.

Earnings per share more than doubled to reach Dh20.08, as compared to Dh8.67 during 2004.

Total Assets registered a hefty growth of 43 per cent whereas growth in Advances was only 26 per cent. Customer Deposits, a key indicator of the Bank's performance, showed a healthy growth of 42 per cent to reach Dh30 billion.

The bank's Advances to Deposit ratio, an indicator of liquidity, improved significantly from 83.4 per cent to 74.2 per cent.

Shareholders equity increased by 50 per cent to Dh7.26 billion, outpacing the growth in Assets and improving the bank's Equity to Assets ratio to 15.8 per cent. The Bank maintained its cautious approach by keeping its provisions level constant and improving its coverage of non-performing loans to over 200 per cent, one of the best in the country.

During the year the bank continued to tap international markets to diversify its funding sources by drawing down US$325 million under its European Mid Term Note programme, as well as issuing a syndicated loan facility of US$250 million. Both offerings were oversubscribed.

To provide greater convenience the bank expanded its distribution and delivery network by adding nine new branches, two Customer Service Centres and 37 ATMs across the country.

Abdul Aziz Al-Ghurair expects the UAE economy to continue to perform well but feels that the pace of growth witnessed during the last two years may begin to ease.

"The outlook for the coming period looks extremely positive. With higher oil prices now stabilised we can expect a continuing high level of investment in construction and infrastructure projects as well as robust growth in other sectors. Although 2006 may not achieve the stellar growth of last year, we believe it will be extremely healthy."

He added that Mashreqbank intends to continue expanding its operations locally and regionally and has developed a comprehensive strategic plan to capitalize on emerging opportunities in the region.

Widest range of Retail Banking products in UAE

The bank reaffirmed its reputation as the most innovative bank in the region by launching various unique products across its business lines, including Unfixed Deposits, the region's first Platinum Credit Card, Step-up savings accounts, Bancassurance, and a number of investments products.

At the EFMA 2005 Cards and Payments Conference and Expo held in Paris in September 2005, Mashreqbank was awarded the first prize in the prestigious Grand Prix 2005 for having the best credit card reward and loyalty programme in the world. Independent research by the EFMA has shown Mashreqbank's cardholder base is growing by 65 per cent annually, in comparison to the market average of 15 per cent.

Mashreqbank also enhanced its Home Loan range of mortgages, which Euromoney magazine has rated as the best mortgage product in the UAE.

At home, the Bank was awarded the Shaikh Mohammad Bin Rashid Al Maktoum Award for performance excellence.

Atif Bajwa, Senior Vice President and Head of Retail Banking Group, said: "Our focus on providing the widest range of value added products and services in the market, together with quality customer service, have given us the widest customer base of any bank in the UAE."

Commercial Banking sees rapid growth in construction and infrastructure

The Bank maintained its leadership in the commercial banking arena and participated in many major infrastructure projects, such as the Dubai Rapid Link Consortium for the Dubai Metro, Dewa L Station Phase 2, Ras Laffan B water pipe in Doha, Qatar, and the iconic Burj Dubai.

Omar Bouhadiba, Senior Vice President and Head of Commercial Banking Group, Mashreqbank, said: "2005 was an excellent year for infrastructure and construction project finance. We are honoured to have been chosen to provide financing and structuring loans for some of the most prestigious projects in the region."

Mashreqbank Asset Management achieves record for growth fund

In just 11 months from its launch, the Makaseb Emirates Equity Fund, managed by Mashreqbank Asset Management, had climbed a record 131 per cent, outperforming any other growth fund in the UAE.

In order to further enhance the its emiratisation drive Mashreqbank launched Mashreq Al Mustaqbal (the Mashreq Future), a fast-track
programme for top calibre UAE graduates to rise to managerial positions in just three years.