Emirate's second largest bank makes profit of US$108.9m on lower provisions
Mashreq, Dubai's second-biggest bank by market value, posted a big jump in fourth-quarter net profit on Tuesday, as provisions dropped and the bank earned more fee income.
The lender made a net profit of AED400m (US$108.9m) in the final quarter of 2012, compared to AED64m in the prior-year period, according to a Reuters calculation based on the bank's full-year earnings statement.
Arqaam Capital forecast the bank would make a quarterly profit of AED146m.
Net profit for the full year stood at AED1.37bn, up from AED820m in 2011, the statement said.
The profit increase between the two fourth quarters was aided by a 29.4 percent growth in operating income.
Over the full year, fee and commission income in 2012 was 20.8 percent higher than it was in 2011.
Impairments dropped to AED826.5m in 2012, down from the AED1.2bn set aside for bad loans in 2011.
Loans and advances increased 9.9 percent over the course of 2012 to AED41.4bn from AED37.7bn at the end of 2011.
By comparison, sector-wide lending growth in the United Arab Emirates stood at 3 percent during the first ten months of 2012, according to central bank figures.
Deposits rose 4.5 percent to AED47.5bn at the end of the 2012.
Mashreq proposed a cash dividend of 38 percent, subject to central bank and shareholders' approval, the statement added.
Moody's downgraded Mashreq by one notch in December to Baa2 from Baa1, citing weak asset quality and problem loan levels higher than its UAE peers.