Mashreq's Q3 net profit falls by 42%

PROFIT FIGURE: Mashreq reported nine-month net profit down by 26 percent. (ITP Images)

Mashreqbank, Dubai's second-largest lender by market value, made a third-quarter profit of AED201 million ($54.72m), a 42 percent drop from a year earlier, after booking hefty provisions.

The lender posted a 26 percent year-on-year decline in the nine months to Sept. 30 to AED1.12 billion without giving quarterly figues which Reuters calculated based on previous statements.

The bank booked provisions of 849 million dirhams in the third quarter as a cushion against bad loans, more than four times its net earnings for the period.

Provisions at the end of the nine months to Sept. 30 stood at 1.4 billion dirhams, the lender said in a statement on Thursday.

The bank has said it has $400 million exposure to heavily indebted Saudi conglomerates Saad Group and Ahmad Hamad Algosaibi & Bros.

"Whilst net profits are below those recorded for the equivalent period last year, this is largely due to our ongoing policy of prudent financial management which has seen us increase our provisions for loans, advances and other financial assets," chief executive Abdul-Aziz al-Ghurair said in the statement.

Earlier this month, the lender filed a case in the United Arab Emirates to claim $398 million owed by AHAB.

The lender said its Tier 1 ratio, or core capital, stood at 15 percent at June 30, comfortably above the central bank requirement of 11 percent. (Reuters)

Print | Email | Discuss this article

| Share |

READERS' COMMENTS

Dont worry
Posted by CH, Dubai on Thursday 29 October 2009 at 18:37 UAE time


They should not worry. They will pick up next Q. There is more traffic in Dubai which is a good sign for Mashreq so thing will get better..............

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic. Arabian Business would like to point out that only comments relevant to the story will be published. Any containing personal insults or inappropriate language will not be approved.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Enter the words above *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM