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Sun 24 Apr 2016 02:28 PM

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Dubai's Mashreq Q1 net profit falls 18%

The lender made a net profit of $144.9 million for the three months to March 31

Dubai's Mashreq Q1 net profit falls 18%

Mashreq, Dubai's third-biggest lender by assets, on Sunday posted a 18.3 percent fall in first-quarter net profit as it failed to recoup as many bad debts as it did in the corresponding period of last year.

The lender made a net profit of 532 million dirhams ($144.9 million) for the three months to Mar. 31, it said in a statement, a decrease on the 651 million dirhams recorded for the corresponding period of 2015.

Mashreq said its profit growth would have been flat on an annual basis if it wasn't for the impact of recoveries in the first quarter of 2015. Recoveries in the banking industry usually refer to the collection of a loan amount from a borrower in default, for which the bank had previously made a provision.

The bank made net impairments worth 366 million dirhams in the first quarter, the statement said, up from the net 196 million dirhams set aside for bad loans in the same three months of last year.

Loans and advances at the end of March were 7.9 percent up on the same point of 2015 at 61.1 billion dirhams, and deposits over the same period grew 6.3 percent to 75.6 billion dirhams.

The bank expects its wholesale operations to grow 25 to 30 percent above the market in 2016 as it pushes into new sectors including real estate, non-bank financial institutions, education, healthcare and multinational companies, John Iossifidis, Mashreq's head of corporate and investment banking, said in February.

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