Mashreq Bank, based in Dubai, has reported a significant surge in net profit for the first nine months of 2023. The bank’s net profit reached Dh5.8 billion, marking a year-on-year increase of 122%. Operating profit also saw a substantial increase, rising from Dh3.2 billion to Dh5.6 billion, representing a 73% jump compared to the same period in 2022.

The surge in profit can be attributed to several factors, with the primary driver being an 82% increase in net interest income. This growth is a result of the bank’s expansion of its balance sheet, healthy client margins, and the prevailing high-interest rate environment. Non-interest income also experienced growth, reaching Dh2.3 billion, an 8.1% increase compared to the previous year.

Mashreq Bank has demonstrated effective control over operating costs, leading to an improved cost-income ratio of over 8% year-on-year. The bank has also invested in enhancing its client experience, risk management, and supporting business growth. The allowance for impairments has experienced a net release of Dh341 million, driven by a decrease in low-risk charges.

The bank’s strong performance is a testament to its growth strategy, commitment to customer excellence, strong operating performance, efficient cost management, and prudent risk management capabilities. Return on Equity (RoE) reached a record-high of 32.1% for the first nine months of 2023, doubling compared to the same period in 2022. Earnings per share stood at Dh28.75.

Mashreq Bank also boasts high liquidity, with a liquid assets ratio of 32.3% and an efficient liquidity coverage ratio of 126.6% as of September 2023. The bank’s capitalisation level remains robust, with capital adequacy, Tier 1 capital, and CET1 ratios standing at 18.6%, 16.3%, and 15.6%, respectively.

The quality of the bank’s loan portfolio has significantly improved, with gross impairments to gross assets at just 0.2%. The non-performing loans to gross loans ratio declined to 1.5%, one of the lowest in the market.

AbdulAziz Al Ghurair, Chairman of Mashreq Bank, expressed confidence in the UAE banking sector’s resilience and growth. He emphasized the bank’s commitment to spearheading the region’s sustainability journey and supporting the UAE’s goal of Net Zero by 2050. Mashreq Bank is dedicated to combating climate change and championing a sustainable future.

Ahmed Abdelaal, Group Chief Executive Officer of Mashreq Bank, highlighted the bank’s commitment to innovation and customer-centricity. The significant growth in net profit and net interest income demonstrates Mashreq Bank’s strength and adaptability. The bank’s digital transformation is gaining momentum, with strategic partnerships and a focus on enhancing the customer experience, fortifying security measures, and optimizing operations through automation.

Mashreq Bank’s remarkable financial performance and strategic initiatives position it for continued success and future growth prospects. The bank remains committed to delivering exceptional value to its stakeholders while championing a sustainable future and embracing digital innovation.