Mashreq, Al Ghurair family, reported a net profit of $278 million in 2021, showing a stable recovery from the previous year’s loss, due to an increase in the operating profit and minimized impairment costs.
Impairment allowances during the period dropped about 39 percent to Dh2.1bn, the bank said on Monday. Its operating income in the 12-month period increased by 12.8 percent on an annual basis to Dh5.8bn last year.
The jump was primarily due to the “increased net interest income and income from Islamic financing coupled with improvements in fees and commission”, Mashreq said.
Mashreq’s operating profit rose about 45 percent annually to Dh3.2bn last year as a result of higher operating income and lower operating expenses, the lender 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, Abdul Aziz Al Ghurair, chairman of Mashreq, said.
“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.”
Mashreq posted strong earnings as the UAE’s economy continues to recover from the coronavirus pandemic as the government steps up its vaccination campaign to curb its spread.
The bank’s customer deposits rose 15 percent yearly, reaching Dh101.5bn by the end of last year. Its liquid assets ratio stood at 29 percent with cash due from banks at Dh46.3bn as of December 31.
In the near term, Mashreq will maintain a “conservative risk appetite” and leverage its digital capabilities to ensure that all its customers receive “the very best services and solutions possible”, Mr. Al Ghurair said.
“To achieve sustainable growth, our focus will remain on the delivery of an enhanced customer experience through existing growth platforms and continued investment in digitization and transformation programmes,” he said.
The bank’s loan-to-deposit ratio remained stable at 80.3 percent at the end of the last quarter. Its total provision for loans and advances reached Dh6.7bn.
Lastly, an increase in customer deposits also played a vital role in the healthy reflection of the results on the 2021 balance sheet. Furthermore, the bank plans to invest in new digital solutions that massively aid revenue growth, enhanced customer services, and expansion across high-growth markets in this year and ahead.