By Abdul Basit
Mashreq has reported a 25% increase in net profit to Dh2 billion for the first quarter of 2024 despite the new corporate income tax of 9% in the UAE.
Abdul Aziz Al Ghurair, Chairman of Mashreq, commented: “Mashreq, has demonstrated remarkable strength and adaptability amid global challenges, maintaining solid asset growth, financing, and capital adequacy ratios. These indicators reflect the sector’s flexibility and resilience to adapt to the changes the world is witnessing.
Mashreq’s strategic positioning within the banking ecosystem aligns with the broader banking outlook across the Gulf Cooperation Council region, which reflects continued growth in the non-oil economy and supportive operating conditions. As Mashreq continues to navigate and contribute to this dynamic environment, we remain steadfast in our commitment to driving sustainable growth and delivering exceptional value to our stakeholders.”
Ahmed Abdelaal, Group Chief Executive Officer, said: “Our Q1 2024 financial results have provided a robust start to the year, showcasing a significant 25% increase in net profit to AED 2.0 billion, despite the new Corporate Income Tax of 9% in the UAE. On pre-tax basis our Net Profit stood at AED 2.3 billion representing an increase of 36% like for like. This remarkable growth is fueled by substantial income expansion and reduced risk costs, highlighting our unyielding commitment to operational resilience and efficiency. Our net interest income has experienced a substantial 23% growth, demonstrating the effective expansion of our balance sheet and resilient client margins. Additionally, our non-interest income has surged by an impressive 29% year-on-year, representing 32% of our total income reflecting the versatility and revenue resilience of our bank.
As we continue to expand, our operational resilience remains a cornerstone of our growth and expansion strategies. It has allowed us to adapt swiftly to economic shifts, maintain service excellence during rapid expansion, and manage risks effectively.”
The Cost-Income ratio improved by 3.5% year-on-year, reflecting the bank’s robust performance. This improvement is characterized by stringent control over operating expenses alongside continuous investments in client experience enhancements, risk management, and business expansion.
Operating profit rose from AED 1.8 billion to AED 2.3 billion in 1Q 2024, a 31% increase compared to the same period in 2023.
Risk costs decreased by 61% to AED 38 million, attributed to last year’s accounting change concerning general provisions and prudent risk management.
The Return on Equity (ROE) reached 28% in 1Q 2024, highlighting management’s continued focus on driving efficiencies, accretive capital deployment, and creating optimal value for its shareholders.
Mashreq’s solid liquidity position is indicated by a Liquid Assets ratio of 35.6% and a Liquidity Coverage Ratio of 154% as of March 2024.
The bank’s capitalization level is very strong and has further improved from the end of 2023, with a Capital Adequacy Ratio of 17.7%, a Tier 1 Capital Ratio of 15.5%, and a CET1 Ratio of 14.9% as of March 2024. – abdulbasit@theuaenews.com
