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Fri 17 Apr 2020 10:59 AM

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Mashreq bank reports 28.3% drop in net profit in Q1 2020 amid Covid-19

Low interest rates have created a tough operating environment for banks

Mashreq bank reports 28.3% drop in net profit in Q1 2020 amid Covid-19
Mashreq is the oldest bank in the UAE

The UAE’s oldest bank Mashreq has reported a 28.3% drop in net profit in Q1 2020 to total AED450 million compared to AED628 million in the same period last year, as Covid-19 challenges continue.

In a statement on Thursday, the bank said its operating income also declined to AED1.5 billion during the first quarter of the year compared to 2019.

However it said it reported significant growth -  164.5% to be exact - in investment income from AED48m in Q1 2019 to AED127m in Q1 2020.

Its total assets also grew by 2% to AED162.6bn, and loans and advances rose by 2.8% to AED78.3bn compared to December 2019. On the other hand, customer deposits declined by 2.7% to AED88.5bn, while loan-to-deposit ratio remained strong at 88.5%.

The bank’s group CEO Ahmed Abdelaal said, “These are difficult times for the whole world and despite a tough operating environment, Mashreq continued its positive growth trajectory in 1Q 2020. We achieved a respectable AED450 million in net profit for the first quarter of 2020 despite strong headwinds like steep decline in interest rates and impact of the COVID-19 crisis. Our revenue has also remained stable with our loans and advances growing by almost 3% in the first quarter of 2020. 

"It is also worth mentioning that our best-in-class non-interest income to operating income ratio increased to 48.7%, compared to 40.4% over the same period last year. Furthermore, we also continued to show robust liquidity with a liquid assets ratio of 31.8%,” he said.

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