Mashreq’s operating profit has surged by 96% during the first quarter of 2023.
Dubai-based Mashreq Bank has reported a massive surge in its operating profit during the first quarter of 2023. The bank announced on Wednesday that its operating profit had increased by a staggering 96%, bolstered by strong performance across its business segments.
Mashreq Bank’s operating profit for Q1 2023 reached AED 1.8 billion, compared to AED 916 million for the same period in the previous year. The bank also reported a significant rise in net profit, which jumped by 71% to AED 1.3 billion from AED 764 million in Q1 2022.
This impressive performance was driven by a number of factors, including robust growth in the bank’s core businesses, increased fee income, and effective cost management. Mashreq Bank also benefited from a lower cost of funding and a healthy balance sheet.
Commenting on the bank’s strong Q1 results, Abdul Aziz Al Ghurair, Mashreq Bank’s Chairman, said: “These results demonstrate our continued progress towards our strategic goals, which include delivering sustainable profitability and growth, providing innovative solutions to our customers, and driving operational excellence across our business.”
He added: “We are particularly pleased to see the strong performance of our core businesses, which underpins our confidence in the bank’s future prospects.”
Mashreq Bank’s retail banking business saw a robust growth in Q1 2023, with deposits increasing by 6% year-on-year and loans growing by 5%. The bank’s Islamic banking arm, Mashreq Al Islami, also reported strong growth, with assets under management increasing by 13% year-on-year.
The bank’s corporate banking and investment banking businesses also saw healthy growth, with revenues from trade finance, cash management, and other corporate banking services increasing by 9% year-on-year. The investment banking business reported a 17% increase in revenues, driven by a strong pipeline of deals and advisory services.
Mashreq Bank’s CEO, Ahmed Abdelaal, said: “We are pleased with the strong performance of our businesses in Q1 2023, which reflects the success of our customer-centric approach and our focus on innovation and digitalization.”
He added: “We will continue to invest in our people, technology, and infrastructure to deliver the best possible experience for our customers, while maintaining a strong risk management framework and ensuring long-term sustainable growth.”
Mashreq Bank’s Q1 results also showed that the bank had effectively managed its costs, with operating expenses decreasing by 5% year-on-year. The bank’s cost-to-income ratio, a key measure of efficiency in the banking sector, improved to 28.2% from 34.3% in Q1 2022.
The bank’s asset quality remained healthy, with a non-performing loan (NPL) ratio of 3.3%, down from 3.7% in Q1 2022. The bank’s provisions for credit losses also decreased by 11% year-on-year, reflecting the bank’s prudent risk management practices.
Mashreq Bank has been actively investing in its digital capabilities and has introduced several innovative solutions to enhance customer experience. The bank’s digital banking platform, MashreqNeo, has seen a surge in usage, with digital transactions increasing by 47% year-on-year in Q1 2023.
The bank has also launched several new products and services, including a digital lending platform and a new mobile app for corporate customers. Mashreq Bank’s digital strategy has been instrumental in attracting new customers and driving engagement with existing ones.
Looking ahead, Mashreq Bank remains optimistic about its future prospects, despite the ongoing challenges posed by the COVID-19 pandemic and global economic uncertainty. The bank is confident that its strong foundations, innovative products and services, and customer-centric approach will help it successfully navigate these difficult times. It also continues to seek out new opportunities for growth in the UAE’s increasingly competitive banking sector. As part of this effort, Mashreq Bank recently launched a new mobile platform for customers, allowing them to perform banking transactions more conveniently and securely. The bank is also in the process of introducing a range of other digital products and services, including a flexible financing option for SMEs. With these initiatives, Mashreq Bank aims to ensure that it remains at the forefront of innovation in the UAE’s banking sector.
Moving forward, Mashreq
