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Dubai’s Mashreq Q3 net profit falls 24.8%

Dubai’s Mashreq Q3 net profit falls 24.8%

Profit was hit by the bank putting aside more cash to cover for bad loans

Mashreq continued its earnings slump on Sunday as Dubai’s third-biggest lender by assets posted a 24.8 per cent fall in third-quarter net profit, weighed by putting aside more cash to cover for bad loans.

The lender made a net profit of Dhs414.95m ($112.98m) in the three months to Sept. 30, it said in a statement, a decrease on the Dhs551.44m recorded for the corresponding period of 2015.

Mashreq, which had reported falling profits in the preceding four quarters, suffered in the latest quarter as allowances for impairments jumped by 82 per cent over the period to reach Dhs470m.

Banks in the United Arab Emirates are facing a more difficult operating environment as the more-than-two-year collapse in oil prices feeds through into higher levels of soured loans and compressed net interest margins.

Net interest income from traditional banking operations rose 0.9 per cent on the same three months of last year to Dhs875m, while net fee and commission income sank to Dhs399m, down 2.3 per cent year on year, the statement said.

For the first nine months of the year, the bank posted a net profit of Dhs1.49bn, lower than the Dhs1.85bn it reported a year ago, according to the statement.

Loans and advances at the end of September were Dhs62.3bn, up 6.7 per cent on the same point of 2015, while deposits over the same period grew 3 per cent to Dhs75.28bn.

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