Mashreq first-quarter profit falls 18.3%

Mashreq, Dubai’s third-biggest lender by assets, on Sunday posted a 18.3 per cent 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 Dh532 million for the three months to March 31, it said […]

Mashreq, Dubai’s third-biggest lender by assets, on Sunday posted a 18.3 per cent 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 Dh532 million for the three months to March 31, it said in a statement, a decrease on the Dh651m recorded for the corresponding period of 2015.

Mashreq said its profit growth would have been flat on an annual basis if it was not 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 Dh366m in the first quarter, the statement said, up from the net Dh196m set aside for bad loans in the same three months of last year.

Loans and advances at the end of March were 7.9 per cent up on the same point of 2015 at Dh61.1 billion, and deposits over the same period grew 6.3 per cent to Dh75.6bn.

The bank expects its wholesale operations to grow 25 to 30 per cent 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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