Mashreq bank is the 3rd largest lending institution of United Arab Emirates (UAE). International Monetary Fund (IMF) anticipated a rise of 4.3% in the economy during the current year in the UAE region which will be beneficial for the lenders. Mashreq bank is another bank which reported good profits for the 3rd quarter of current year.
Mashreq bank reported a net income of Dh596.8 millionfor the 3rd quarter (ending on 30th September) of the year 2014. During the same period of the last year it reported a net profit of Dh473.2 million. This represents an increase of 26.1%. The increase is mainly due to rise in income from primary business of bank.
The main reason for bank’s performance is the increase in interest incomewith the segmental profits rising to Dh785.6 million showing an increase of 25.6% as compared to previous year’s corresponding period. This wasassisted by a growth in loans of 14% as total loans amount to Dh 57.3 billion. The commission income and net fees increased by 5.8% from last year and amounted to Dh425.4 million. The net income for the first three quarters of this year amounted to Dh1.76 billion while the profit for the same period of the last year was Dh1.3 billion. Also the provision for doubtful debts increased during the 3rd quarter to
to Dh304.2 million from Dh242.3million.
In the recent times banks had to create shield against bad and non-performing loans after negotiating loan restructuring due to financial and real estate crisis, although during the last couple of years improved asset quality has assisted in banks’ better earning performance as they have reclassified certain non-performing loans as good ones.
The Chief Executive of Mashreq bank, Abdul Aziz Al Ghurair said that they are looking to diversify in other countriesand they are looking forward to Turkey and Egypt for acquisitions as the local environment is very competitive and there are about fifty one banks that are fighting for local market share.