Mashreq posts 28% growth in net profit for first nine months of 2012

Loans and Advances grew over the last nine months by 7.5% to reach Dhs40.5bn as of September 2012, compared to Dhs37.7bn at the end of 2011.

Mashreq continued to rationalize its liability structure by shedding high cost deposits, leading to a 4.1% reduction in Customer Deposits as compared to December 2011, reaching Dhs43.5bn.

As per the bank's balance sheet management strategy, the bank's Total Assets witnessed a moderate decline of 3.6%, reaching Dhs76.4bn compared to Dhs79.2bn as of 31st December 2011.

Liquid assets to total assets stand at 27% with Cash and due from banks at Dhs20.4bn as of September 2012.

The bank's growth in loans along with shedding of high cost deposits moved its loan-to-deposit ratio from 83% at the end of December 2011 to 93% in September 2012. Mashreq's Provisions for loans and advances continued to decrease and for the first 9 months of the year reached Dhs533m which is a decline of 37% as compared to the same period last year. The bank's efficiency ratio stood at 46.4% at the end of September 2012.

The bank's capital adequacy increased to 23.05% compared to 22.64% as of December 2011 while its Tier 1 capital ratio stood at a healthy 17% as of September 2012.

Commenting on the latest figures, H.E. Abdul Aziz Al Ghurair, CEO of Mashreq characterized the results as 'promising'. "The last two quarters in particular have shown very promising trends which have culminated in a healthy bottom line growth. We are witnessing increasing stability in the UAE and look forward to continuing this positive growth in the coming quarters."

Al Ghurair continued, "We are cautiously optimistic, and will continue to build on the positive performance while ensuring that we follow our long-term strategy of sustainable growth in the coming period."

The total operating income for the bank during the period under review was Dhs2.9bn, representing a slight 1.6% drop relative to the same period last year. However on a quarterly basis the third quarter of 2012 saw operating income increase by 26.5% over Q3 2011 to reach Dhs1bn. Similarly, Net Interest Income for the third quarter witnessed an increase of 12.5% over Q3 2011 to reach Dhs499m.

Mashreq's best-in-class net fee, commission and other income to operating income ratio remained high at 52.1%, led by a 9.85% growth in net fee and commission income and a 66.14% growth in investment income during first 9 months of this year as compared to the same period in 2011.

General and Administrative expenses for the period increased by 3.91% to reach Dhs1.36bn. Earnings per share for the publicly listed bank increased by 28% from Dhs4.47 in September 2011 to Dhs5.74 this year.