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Mashreq Bank, the Dubai lender controlled by the Al Ghurair family, announced a 5.4% rise in net income in the second quarter as provisions for non-performing loans declined.
Net profit for the three months ended June 30 climbed to 593 million dirhams, the lender said in a statement released Monday. The write-downs for the reporting period fell by 23.1 percent to MAD 221 million. The 32.2% increase in investment income also supported the lender's quarterly earnings, she added.
Net profit for the first six months of 2019 also increased by 5.2 percent to 1.2 billion dirhams, with the depreciation value of loans and advances falling 18.2 percent year-on-year, said Mashreq. .
The total amount of provisions for loans and advances amounted to 4 billion dirhams, ie a coverage of 128% for non-performing loans. Its ratio of unproductive loans to gross loans declined slightly to 3.5% at the end of June 2019, he added.
"Our depreciation provision is down … our loan-to-deposit ratio remained robust at the end of the second quarter of 2019," said Mashreq chief executive Abdulaziz Al Ghurair. "I am confident that we will maintain our strong position as we continue to pursue our customer centric strategy and innovate."
The Mashreq, which plans to spend 500 million dirhams on digital transformation over the next five years, has made tremendous progress in improving the banking experience of its customers in the first half, said Al Ghurair.
"The banking landscape in the region is evolving at a rapid pace and for any bank to have a strong digital infrastructure, it is a prerequisite for its success," he said. "Mashreq has been at the forefront of technology and will continue to introduce innovative services and products to meet the evolving needs of customers."
The Mashreq, which also announced a 5% rise in net income in the first quarter, plans to close half of its UAE branches this year, replacing physical infrastructure with digital "bricks", said Mr. Al Ghurair. The National in a March interview. The bank has seen a decline in the need for traditional sites as the technology evolves. About 97 percent of Mashreq transactions take place on a digital platform, he said at the time.
Like their counterparts around the world, Persian Gulf banks are investing in digitizing their operations and moving away from the traditional business model of the agencies. Mashreq's strategy is consistent with the growing trend in the financial sector as large branch networks are expensive to operate and maintain.
"Our branch transformation strategy is the first such initiative in the region and we are confident that it will help redefine the banking sector in the Middle East," said Al Ghurair on Monday.
Last Updated: July 21, 2019 16:38
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