Mashreq’s annual profit surges to record on higher net income

Mashreq Bank reported a record 163 per cent jump in full-year net profit to $2.3bn (Dhs8.6bn), helped by higher net interest income, which soared by 69 per cent year-on-year (YoY).

The bank’s operating profit surged by 70 per cent to Dhs7.5bn in 2023 compared to Dhs4.4bn, driven by the prevailing high-interest rate environment and positive one-offs relating to loan loss provisioning.

Its non-interest income reached Dhs3.1bn in 2023, up 13 per cent compared to the previous year while the bank’s cost-to-income ratio improved by over 8 per cent YoY.

“Our strategy and robust operational execution have been pivotal in achieving this growth which spans across all businesses and geographies,” said Ahmed Abdelaal, Mashreq’s group CEO.

The Dubai-listed lender said its impairment allowance experienced a net release of Dhs1.4bn, supported by high recoveries from non-performing loans (NPLs) and a one-off release of the general provision.

Mashreq achieves historical financial milestone in 2023, with its net profit soaring by an impressive 130% to reach an unprecedented AED 8.6 billion amidst exceptional income growth and significantly reduced risk costs.

H.E. Abdul Aziz Al Ghurair, Chairman of Mashreq: ” In… pic.twitter.com/Nx1z7xl1ig

— Mashreq (@MashreqTweets) January 29, 2024

Mashreq’s NPL to gross loans ratio dropped by 1.3 per cent as of December 2023 (2.2 per cent as of December 2022.

The bank’s total assets reached Dhs240bn as at December 31, 2023, up 21.7 per cent YoY compared to Dhs197bn in 2022, which was attributed to the robust growth in operating income, enhanced efficiencies and improved risk position.

Mashreq’s sustainability push

Meanwhile, Mashreq was hailed as one of the top contributors to the UAE Banks Federation’s (UBF) pledge to mobilise Dhs1tn in sustainable finance by 2030.

Earlier in December, the bank pledged to facilitate Dhs110bn in sustainable finance by 2030, building on its years of sustainable finance deployment and ongoing efforts to facilitate financing for multiple adaptation-related projects in Egypt, the UAE, Qatar, Saudi Arabia and Bahrain.

“Mashreq has reinforced its commitment to sustainable finance, ensuring that our business strategies are fully integrated with the environmental objectives underscored by COP28,” the bank’s chairman AbdulAziz Al Ghurair said in the statement.

The bank’s commitment to sustainable finance is part of its Climb2Change global initiative, which integrates its wide-ranging environmental, social and governance (ESG) milestones and impactful contributions to shaping a sustainable future while facilitating the finance required to combat climate change.

Read: Mashreq to facilitate Dhs110bn in sustainable finance by 2030