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Mashreq’s Q3 Profit Down 12.5 Per Cent

DUBAI — Mashreq Group, UAE’s fourth largest financial institution by assets, said on Saturday its third quarter net profits dropped 12.5 per cent due to a fall in investment income.

The bank said net income for the three months ending September 30 fell to Dh346 million compared to the same 2007 period. The decline was 56.6 per cent when compared to 2008 second quarter’s net income of Dh797.8 million. The fall was caused by a decline of 86 per cent in investment income — from Dh553 million to Dh75 million — in the first nine months, the bank said. “This was mainly due to a decline in valuations and poor liquidity in the global and regional markets,” it said.

Other banks in the UAE, including Emirates NBD and Abu Dhabi Commercial Bank, also reported write-downs due to a decline in regional share prices. The bank’s net profit for nine months ending September 30 grew 12.3 per cent to Dh1.5 billion as compared to Dh1.3 billion for the same 2007 period. Total assets of the group grew by 26.7 per cent to Dh94 billion from Dh74.2 billion during the nine-month period. Customer deposits reached Dh51.7 billion, representing an increase of 17.7 per cent over last year’s deposits of Dh43.9 billion, while customer advances grew by 59.8 per cent, to Dh56.1 billion from Dh35.1 billion, the bank said. Abdul Aziz Al Ghurair, CEO of Mashreq, said: “The UAE banking sector remains resilient. Mashreq enjoys a long history of more than 41 years of trust of customers in the UAE.”

He said Mashreq is in a healthy state. “We are committed to our expansion plans locally and regionally. The 2009 plan includes opening 12 new branches in the UAE and 10 new branches in Egypt”. The growth in total assets contributed to a marked increase in net interest income. Net fee, commission and other income also recorded a growth of 43 per cent over last year. Total operating income registered a growth of 23.8 per cent to Dh3.2 billion as against Dh2.6 billion in the same period last year.

“For the 3^rd quarter of 2008, the net interest income witnessed an increase of 70 per cent, while the net fee commission and other income and operating income for the three months period showed 40 per cent increase over the 3^rd quarter of 2007. The operating income went up by 14 per cent as compared to same period last year. The bank said as it continued to invest in human resources, infrastructure development and technology, expenses for the six months of 2008 were higher than same period last year by 35 per cent.

· issacjohn@khaleejtimes.com