Mashreq, the UAE’s sixth-largest bank by asset size, has reported net profit growth of six percent for the first quarter to $72.2m.
The Dubai lender said that total assets remained flat over the quarter at $23.01bn.
Mashreq also said that its provisions for loan losses had decreased by 33 percent to $88.6m.
The drop in provisioning is positive news, given that UAE banks have been forced to set aside considerable sums over the last two years in case of loan defaults.
In December last year, the UAE central bank ordered the countries lenders to increase provisions against exposure to certain Saudi family-owned entities from 50 to 80 percent.
The bank also reported that customer deposits decreased by two percent to $13.6bn over the quarter.
Mashreq said its capital adequacy ratio stood at 22.05 percent, while its tier one ratio – its core equity capital – was 15.44 percent.
“We look forward to maintain a momentum in growth in the coming period across the bank’s division, whilst ensuring that our business objectives are met,” said Mashreq CEO Abdulaziz Al Ghurair, in a company statement.
Mashreq was further boosted earlier in April when ratings agency Standard & Poor’s (S&P) upgraded its outlook on the bank to stable from negative.
The agency said that while it expected “asset quality to remain under pressure, we believe that the bank’s sound earnings generation should allow it to buffer a high cost of risk. In addition, the bank’s funding profile has improved over the past 18 months.
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