Dubai’s Mashreq Q4 net profit slides 20.7%

Mashreq, Dubai’s third-biggest bank by assets, reported a 20.7 per cent fall in fourth-quarter net profit on Wednesday, its sixth quarter in a row of falling profits, as fees and commission slipped and impairment allowances jumped.

The lender made a net profit of Dhs441m ($120m) in the three months to December 31, it said in a statement, down from Dhs556m recorded for the corresponding period of 2015.

Banks in the United Arab Emirates are facing stronger headwinds as a sag in oil prices feeds through to higher levels of bad loans and squeezed net interest margins.

Mashreq said it made impairments for bad loans worth Dhs425m in the fourth quarter, up 34 per cent from the same three months of last year.

Loans and advances at the end of December were 1.4 per cent up on the same point of 2015 at Dhs61bn, while deposits over the same period grew 4.6 per cent to Dhs77bn.

Net interest income and net income from Islamic products rose 2.3 per cent from a year earlier to Dhs891m, while net fee and commission income dropped 8.2 per cent to Dhs392m, the bank said.

For the full-year of 2016, the bank reported a net profit of Dhs1.9bn, down from Dhs2.4bn a year earlier.