Mashreq has reported a
net profit for the 12 months to 31 December of AED803m ($218.6m), a
fall of 19.7% year-on-year and the third successive year profit has
declined at the UAE-based lender.
Net interest income and
income from Islamic products net of distribution rose by 9% over
last year to AED 2.3bn.
But net fees and
commissions declined by 27.5% to AED2.1bn, contributing to an 11%
fall in gross revenue to AED4.4bn (FY09: AED4.96bn).
Fiscal 2010 highlights
included:
- Provisions for loan losses declined by
16% to AED1.76bn; - Non-performing assets increased by only
8% to AED 3.9bn, despite challenging market conditions; - Mashreq’s loan to deposits ratio in
fiscal 2010 was 80.4% compared with 88.95% the previous year; net
advances fell by 13.6% to AED41.2bn while deposits fell by only
4.5% to AED51.2bn; - Successful cost control resulted in
operating expenses remaining flat; - Mashreq’s capital adequacy ratio improved
to 22.7% from 20.2% with its tier one ratio rising to 15.9% from
14%.
Abdul Aziz Al Ghurair,
Mashreq CEO said:
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By GlobalData“The results achieved
highlight our strategy to continue operating prudently and
profitably.
“As we continue to
monitor market conditions, Mashreq remains committed to its
strategic objective of delivering robust and sustainable financial
results.”
Looking ahead, Al
Ghurair said: “In line with our strategy to expand both locally and
regionally and offer our products and services to meet market
requirements, we will continue to look at other regions to further
leverage on our strong network of branches and offices.”
In the past year,
Mashreq has invested heavily in the implementation of a new core
banking system from Oracle subsidiary, i-flex.
In 2010, Mashreq also
launched a branch refurbishment plan across its network, with
around 70% of outlets upgraded by the end of the year.