Mashreq, one of the UAE’s leading financial institutions, has reported a 38% increase in its Net Profit in 2013, climbing to AED1.8 billion compared to AED1.3 billion at the end of December 2012.
The bank’s Total Operating Income for the period grew to AED4.8 billion, an increase of 18.4% compared to a year earlier, driven by both Net Interest Income and Net fee and commission income.
The bank’s Net Interest Income at the end of December 2013 was up by 23.9% compared to a year earlier, driven by 21.8% year-on-year increase in loan volume and 39 bps improvement in net interest margin from 2.55% in December 2012 to 2.94% this year, which was predominantly led by change in balance sheet structure and composition of loans.
Mashreq’s best-in-class Net Fee, Commission and Other Income to operating income ratio remained high at 51.3 % led by a 21.2% growth in Net Fee and Commission Income and 23.2% growth in Other Income.
General and Administrative Expenses for the period increased by 10.0% compared to a year earlier to reach AED2.0 billion; However Mashreq’s Efficiency Ratio improved by 3.2% on a year-on-year basis to reach 42.2 % at the end of December 2013.
Earnings per share strengthened to AED10.68 at the end of December 2013 compared to AED7.76 a year earlier.
Asset quality continued to improve as Non Performing Loans to Gross Loans ratio reduced from 9.4% in December 2012 to 6.0% at the end of December 2013. Mashreq’s Allowances for impairment, net, for 2013, was AED873 million, and Total Provisions for Loans and advances reached AED 3.10 billion, constituting 97% coverage for Non Performing Loans as on December 31, 2013.
Mashreq’s capital adequacy ratio and tier 1 capital ratio continue to be significantly higher than the regulatory limit and stood at 18.2% and 16.4% respectively, at the end of December 2013.
Mashreq’s CEO, H.E. AbdulAziz Al Ghurair, said “Our annual financials reflect solid and sustainable growth. We are constantly innovating to give our customers what they need, and a 38% increase in net profits to AED 1.8 billion underscores this. More and more people, whether retail or corporate customers, recognize that Mashreq is the bank of choice for them, providing the financial tools to allow them to manage their finances on their own terms.”.
He continued: “The banking industry as a whole has enjoyed a strong 2013 – which is good for the UAE. The banking industry is in a strong position and the performance of the banks can be used as a measure of wider economic performance, so a healthy banking industry is indicative of a healthy economy.” Mashreq’s Total Assets increased by 17.4% to reach AED89.7 billion in 2013, compared to AED76.4 billion at the end of 2012. Liquid Assets to Total Assets stood at 27% with Cash and Due from Banks at AED23.8 billion at the end of the fourth quarter.
Loans and Advances grew by 21.8% during 2013 to reach AED50.4 billion, compared to AED41.4 billion at the end of December 2012. Customer Deposits increased by 23.5% during the same period to stand at AED58.6 billion at the end of December 2013.
The Bank’s Loan-to-Deposit ratio remained stable at 86% at the end of 2013 as compared to 87% in December 2012.