Finance & Capital Market
Mashreq Bank swings to $272m net profit in 2021
Mashreq, a UAE-based financial institution, has reported a net profit of AED1 billion ($272 million) for 2021 compared to a loss of AED1.3 billion the previous year, mainly driven by robust growth across loan portfolio and an improved credit environment.
Mashreq, one of the leading financial institutions in the UAE, has reported a net profit of AED1 billion ($272 million) for 2021 compared to a loss of AED1.3 billion the previous year. This was as a result of both an increase in operating profit and a decrease in impairment allowance by 38.7% Y-o-Y.
Announcing its financial results for year ending December 31, 2021, Mashreq said its operating income has increased by 12.8% over the previous year to AED5.8 billion due to increased Net Interest Income and Income from Islamic financing coupled with improvements in fees and commission
The Emirati bank’s non-interest income to operating income ratio continues to remain high at 47.5% (48.0% as of December 2020)
Mashreq said operating profit grew by 44.5% to hit AED 3.2 billion compared to YE 2020 as a result of higher operating income and lower operating expenses. Its growth of 15% YTD in Customer deposits surged to hit AED 101.5 billion.
Total provision for loans and advances reached AED 6.7 billion and coverage ratio stood at 128.2% as on December 31, 2021 (up from 125.0% in September 2021)
On the solid performance, Chairman Abdul Aziz Al Ghurair said: "The combination of a steady return to growth across the national economy, and the successful application of the bank’s digital and operational strategies provided a strong platform for growth in 2021."
"We recorded significant improvements in operating income and net profits by year-end, driven in part by robust growth across the loan portfolio and an improved credit environment characterized by reduced impairments and a slight reduction in our non-performing-to-gross loan ratio," he added.
Group CEO Ahmed Abdelaal said: "In 2021 we sought to lay down the foundations for long-term, inclusive growth through new investments in our people and innovative digital solutions."
"Our prudent operating model and core focus on customer centricity delivered a return to growth across almost all metrics, including profit. This strong performance comes as a result of increased operating income and reduced operating expenses," he noted.
Growth in customer deposits also played an important role in the delivery of a healthier balance sheet in 2021, as did increases in loans and advances.
"We were pleased to see a strong growth in CASA deposits and a double-digit increase in total assets," he noted.
Mashreq will leverage its investments in new digital solutions to deliver revenue growth, more enhanced customer journeys, and geographic expansion across high-growth markets, he added.-TradeArabia News Service