Q4 net profit at $42.4m; bank expects better performance in 2011
Quarterly profit at Dubai bank Mashreq swung to a profit in the latest quarter on higher interest income and lower loan losses as it recovers from the burst of Dubai's asset and real estate bubble.
Mashreq made a profit of $42.4m in the three months to Dec 31, Reuters calculated, compared with a net loss of $32.4m a year earlier.
It reported a full year net profit of $218.6m in an emailed statement.
"While 2010 has been a year of steady recovery, we anticipate further improvement in 2011," Chief Executive Abdul Aziz Al Ghurair said in a statement.
Provisions for bad loans fell 16 percent to $479.2m at the end of 2010, and non-performing assets increased to $1.06bn from $980.1m.
Mashreq also said it took 80 percent provision for loans made to Saudi groups Saad and Algosaibi, in addition to provisions it had already taken against its Dubai World loans.
The UAE banking sector is heavily exposed to indebted state conglomerate Dubai World, with estimates of potential exposure ranging up to $15bn, the majority believed to be held by Dubai banks, including Mashreq.
The bank also said its capital adequacy ratio strengthened to 22.7 percent from 20.2 percent.
Reuters calculated quarterly figures from previous financial statements. The lender reported a nine month profit of $176.3m to the end of Sept 30.