Mashreq, Dubai's third-biggest lender, reported a 139.4 per cent surge in its second-quarter profit on the back of lower impairments and higher interest income.
Net profit attributable to owners of the parent for the three months to the end of June climbed to more than Dh1.9 billion ($517 million), the lender said on Wednesday in a filing to the Dubai Financial Market, where its shares are traded.
Impairment allowances for the period declined 120 per cent to Dh43 million, while net interest income and income from Islamic financing jumped 84.4 per cent annually to Dh1.8 billion.
“This robust performance stands as a tribute to the resiliency and vigour of the UAE banking system and its fortified capital buffers,” Mashreq chairman AbdulAziz Al Ghurair said. "These foundational strengths have enabled us to successfully navigate the complexities of the digital banking landscape and adapt our strategies seamlessly."
The bank’s six-month profit increased nearly 150 per cent to Dh3.5 billion as impairment allowances decreased 88 per cent to Dh54 million and net interest income and income from Islamic financing surged 96 per cent to Dh3.6 billion. Operating expenses rose 17 per cent to Dh1.45 billion.
Loans and advances for the six-month period grew 5.2 per cent year on year to Dh95 billion. Customer deposits, meanwhile, increased 16 per cent annually to Dh126.7 billion. Total assets grew 11.8 per cent to Dh211 billion.
“Our prudent risk management strategy, which prioritises improving asset quality, has been … a critical factor in our success,” said Ahmed Abdelaal, group chief executive. “It has led to considerable improvement in our risk position, significantly bolstering our profitability.”
The banking sector in the UAE is well capitalised with adequate liquidity buffers and remained resilient last year against the risk of stagflation and market uncertainties in the central bank’s stress-testing exercise.
The banks also benefited from the UAE’s robust economic momentum last year, as aggregate credit growth rebounded and profitability jumped, the UAE Central Bank said in its Financial Stability Report 2022 this month.
The UAE’s gross domestic product grew by 7.9 per cent in 2022 to reach Dh1.62 trillion at constant prices, supported by its non-oil sector as the country continues with its economic diversification strategy, according to preliminary estimates from the Federal Competitiveness and Statistics Centre.
