Mashreq’s Q1 2023 net profit soars to Dhs1.6bn
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Mashreq’s Q1 2023 net profit soars to Dhs1.6bn

Mashreq’s Q1 2023 net profit soars to Dhs1.6bn

The bank reported an operating profit of Dhs1.8bn, up 96 per cent compared to the same period a year earlier

Mashreq Bank CEO Ahmed Abdelaal

Dubai-based Mashreq reported a record 163 per cent jump in Q1 2023 net profit to $436m (Dhs1.6bn), helped by the growth in operating profit and sound economic conditions.

The bank reported an operating profit of Dhs1.8bn, up 96 per cent compared to the same period a year earlier, driven by healthy operating income growth in the UAE and across other countries. Improved efficiency – cost to income ratio stood at 30.2 per cent in Q1 2023 compared to 40.3 per cent in the first quarter of 2022.

Mashreq’s non-interest income to operating income ratio continues to remain one of the industry’s best at 30.7 per cent while credit cost dropped by 58 per cent year on year.

The bank said its impairment allowance reduced significantly to Dhs96m in Q1 2023 on the back of improved asset quality and represents only 0.1 per cent of net loans. Total provision for loans and advances reached Dhs4.9bn and coverage ratio improved to 231.3 per cent as of March 31, 2023.

The lender’s total assets crossed Dhs200bn, up 10.2 per cent year-on-year (YoY) compared to Dhs183bn in the same period last year, which was attributed to the robust growth in operating income, enhanced efficiencies and improved risk position.

“We have maintained a strong liquidity and capital position, with customer deposits growing by 5.6 per cent year-to-date (YTD) to reach Dhs120.2bn and our non-interest income to operating income ratio remaining high at 30.7 per cent,” said Ahmed Abdelaal, Mashreq’s Group CEO.

Mashreq is actively participating in the UAE’s innovation ecosystem, becoming a founding member of the DIFC’s venture-building program, Launchpad, during the first quarter of the year.

The bank’s performance was further supported by the introduction of numerous platforms and digital journeys, both domestically and internationally, across retail, business, and corporate and investment banking.

“The effectiveness of Mashreq’s digital strategy is evident through the substantial increase in customer deposits, improved cost-to-income ratio, and remarkable net profit growth,” the bank said in a bourse filing.

Mashreq’s approach to sustainability

Meanwhile, Mashreq said places a strong emphasis on sustainability, especially as the UAE is set to host COP28. The bank made significant strides in its sustainability journey, obtaining third-party assurance for its sustainability report in line with international standards.

Mashreq BankMashreq has financed sustainable and adaptation-linked investments worth $15.5bn since January 2021 as businesses and governments globally are increasingly recognising that environmental, social and governance (ESG) risks and opportunities are fundamental to guarantee long-term success.

Earlier in April, the lender said it joined the World Green Building Council’s (WorldGBC) advancing net zero readiness framework as a collaborator in the MENA region to advance sustainable investing.

The progress made in product expansion and geographic reach in Q1 2023 marks a crucial milestone for the bank, with the approval of a digital license in Pakistan and considerable expansion in Egypt, said Mashreq.

Read: Mashreq bolsters sustainability goals by joining World GBC


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