Dubai-headquartered Mashreq reported a record net profit of Dh8.6 billion for 2023, a substantial 130% year-on-year increase.
The surge in operating income and net profit is attributed to a 69% year-on-year net interest income increase driven by robust client margins, business growth, and a high-interest rate environment. The cost-to-income ratio improved by over 8% year-on-year.
The bank’s operating profit saw a significant rise from Dh4.4 billion to Dh7.5 billion in 2023, reflecting an almost 70% increase compared to the same period in 2022. The impairment allowance experienced a net release of Dh1.4 billion, driven by recoveries from non-performing loans (NPLs) and a one-off release of the general provision.
“With the UAE banking sector reaching a historic high and total assets crossing the Dh4 trillion mark, we look forward to 2024 with a sense of optimism and readiness to uphold and extend this trajectory of dynamic and continued growth,” said HE Abdul Aziz Al Ghurair, Chairman of Mashreq
“Our franchise continues to yield outstanding results, bolstered by the addition of a substantial number of new clients and the deepening of existing relationships across the bank,” he added.
In 2023, Mashreq maintained high liquidity, with a liquid assets ratio of 33.6% and an efficient liquidity coverage ratio of 134%. The capitalisation level remains robust, featuring a capital adequacy ratio of 16.5%, a Tier 1 Capital ratio of 14.3%, and a CET1 ratio of 13.7% as of December 2023.
“Internationally, the benefits of our diversified business model have become notably evident,” said Ahmed Abdelaal, Group CEO, Mashreq.
“We have achieved robust growth in our international operations, notably expanding into new markets such as Pakistan and Oman,” he added. “Additionally, our intensified efforts in well-established markets like the UK, Hong Kong, and the US are primed to fuel future growth.”
The overall loan portfolio quality improved, with gross impairments to gross advances at just 0.3% (compared to 0.9% in 2022). The non-performing loans to gross loans ratio declined to 1.3% as of December 2023 (from 2.2% in December 2022), positioning it as one of the lowest in the market. The coverage ratio improved to 247.5% as of December 2023, compared to 190.8% in December 2022.
