Mashreq, one of UAE’s leading financial institution, has achieved a net profit of Dh484 million ($132 million) for the first quarter of 2009 as against Dh465 million for the same period last year, representing a growth of 4 per cent.

As part of strategic repositioning of Mashreq Assets / Liabilities in view of present global financial crisis, the total assets of the group were brought down to Dh90.66 billion from Dh93.2 billion at end of 2008.

Customer deposits reached Dh54.5 billion, showing an increase of 6 per cent over last year-end of Dh51.5 billion, while customer advances have declined by marginal 2 per cent, to Dh53.9 billion from Dh55 billion.

This resulted in improved advances to customer deposits ratio of 98.8 per cent as against 106.9 per cent at end of 2008.

Commenting on the results, Abdul Aziz Al Ghurair, CEO of Mashreq, said the UAE banking sector remained resilient in the face of the international financial crises.

'Positive financial results, in addition to ongoing development of alliances both locally and regionally, reflect Mashreq’s strength and soundness to maintain operations and accessible services even when the economic tide turns.'

'Our main focus now is on our basic banking operation and further cementing our relationship with our clients and partners,' he explained.

In spite of decline in advances, Mashreq maintained the overall spread and Net Interest Income went up from Dh493 million for same period last year by 18 per cent to Dh582 million for the first quarter of 2009.

The non interest income (fee, commission, investments and other income) soared 15 per cent to Dh645 million from Dh561 million for the first quarter of last year.

The operating income reached Dh1.22 billion during the current quarter as against Dh1.05 billion for the same period last year, attaining impressive increase of 16.4 per cent.

'Our efforts in strategic diversification of revenue streams proved more than satisfactory achieving Other Income to Gross Income ratio of 53 per cent.  In view of the current economic situation, Mashreq has increased its loan loss reserves enhancing the charge for the quarter to Dh232 million,' Al Ghurair noted.

'With this the provisions held for impaired specific advances along with General Provision for Performing Advances reached Dh1.28 billion providing 264 per cent coverage to non-performing portfolio.

As part of the bank’s long term strategy, Mashreq continues to invest in human resources, infrastructure development and technology.

This has resulted in the expenses for the three months of 2009 being 12 per cent higher than last year. Nevertheless, Operating Expenses to Income ratio was satisfactory 39 per cent as against 41 per cent for the same period last year, he noted.

Continuing efforts to provide its accessible banking services abroad, Mashreq finalized the official launch of its retail operations at its new head office in Cairo with a capital of $100 million.

Additional plans to open four Mashreq Gold centers for the remainder of 2009 are also in the the pipeline, Al Ghurair added.

Badr Al-Islami, the Islamic Banking Division of Mashreq, won the ‘Sukuk Deal of the Year 2008’ award from the prestigious Islamic Finance News Awards, for being the Joint Lead Manager and Bookrunner in the Dh1.1 billion Tamweel Sukuk.

This year, Badr also announced its alliance with Ras Al Khaimah Investment Authority (Rakia), to be the official Trust Account Manager for all developers of RAKIA owned Real Estate Projects in the emirate of Ras Al Khaimah.

Mashreq also partnered with PayMate, India’s leading mobile commerce company to launch mobile payments in the UAE.

Concurrently, Mashreq capital and investment groups continue to be a strong player among the regional bond market and Islamic sukuks, recently being one of the ten savings banks working alongside Qatar National Bank as part of the Vodafone Qatar IPO