Increased operational activities drives revenue growth: Net Interest Income (NII) increased by 13% year-on-year, propelled by sizable balance sheet expansion and sustained healthy client margins. This growth underscores our effective asset-liability management and strategic focus on core lending activities. In addition, non-interest income surged by 21% compared to the previous year, now comprising 30% of the total operating income. This significant contribution reflects our success in diversifying revenue streams through enhanced fee-based services and other non- interest-generating activities.

·         Continued Strength in Balance Sheet Expansion: Our solid organic expansion carried through the third quarter, highlighted by a 12% year-to-date growth in lending and a 7% uplift in customer deposits. The growth in loans and advances demonstrates our commitment to meeting clients’ financing needs across various sectors, while the uptick in deposits signifies increasing customer confidence and an expanding client base. This balance sheet growth positions us favorably to seize emerging market opportunities and support sustainable growth.

·         Solid Financial Position and Enhanced Operational Efficiency: We maintained a strong capital position with a Capital Adequacy Ratio of 19.8%, surpassing regional benchmarks and reflecting prudent risk management practices and substantial capital buffers. This robust ratio ensures our readiness to meet regulatory requirements and absorb potential market shocks. Our Return on Equity is 25.8%, highlighting efficient capital utilization and our ability to generate attractive returns for shareholders. Moreover, the Cost-to-Income Ratio improved to 27.9%, showcasing our ongoing commitment to operational efficiency and effective cost management, which bolsters our capacity to invest in strategic initiatives and drive long-term profitability.

Dubai, UAE; 29th October 2024: Mashreq is proud to report its strong financial performance for the first nine months of 2024, showcasing the bank's dedicated commitment to its strategic priorities. These include placing clients at the forefront of our efforts, enhancing operational and financial effectiveness, enforcing stringent risk management practices, and cultivating a culture that values and empowers our employees. The achievements highlight the successful execution of our strategic plans and our unwavering dedication to delivering an unparalleled, world-class experience to our clients.

1.     Operating Income & Net Profit

·       Mashreq reported a pre-tax net profit of AED 6.5 billion in the first nine months of 2024, indicating a notable 9% increase over the same period last year, despite an increase in corporate income tax with almost AED 500 million. This growth in net profit is attributable to a 13% year-on-year surge in net interest income, as well as 21% year-on-year increase in non-interest income. Principal drivers of this increase are strong business growth with healthy margins, the benign interest rate environment, and relative low risk costs.

·       The Cost-Income ratio at 27.9%, highlights the bank’s strong overall performance and operational efficiency. The bank continued its focus on cost efficiency through digitalization and innovation, coupled with ongoing investments in business growth, enhancing client experience and strengthening of the overall operational resilience.

·       Operating profit rose from AED 5.6 billion to AED 6.6 billion in 9M 2024, representing a 17% increase compared to the same period in 2023.

·       Risk costs continue to be low at AED 73 million, highlighting the banks prudent risk management practices and the positive economic climate of most markets Mashreq operates in.

·       Mashreq’s Return on Equity (ROE) reached 25.8% for 9M 2024, showcasing the management’s commitment to deliver optimal value to shareholders.

2.     Liquidity & Capital position

·       Mashreq’s solid liquidity position is indicated by a Liquid Assets ratio of 31% and a Liquidity Coverage Ratio of 129% as of September 2024.

·       As of September 2024, the bank’s capitalization levels have further strengthened compared to the end of 2023, reflecting the bank’s commitment to maintain a robust financial position. The Capital Adequacy Ratio improved to 19.8%, the Tier 1 Capital Ratio increased to 17.7%, and the Common Equity Tier 1 (CET1) Ratio rose to 16.1%. These enhancements underscore Mashreq’s high profitability and sound capital management strategy, positioning the bank well to enable future growth, return a healthy dividend to its shareholders and withstand potential market fluctuations.

3.     Credit Environment & Asset Quality

·       As of end of September 2024 the Non-Performing Loans to Gross Loans ratio is at 1.5% and is one of the lowest in the market, while the Coverage ratio remains high at 191.3%.

H.E. Abdul Aziz Al Ghurair, Chairman of Mashreq said:

“Despite decreased growth forecasts for the world economy, the UAE economy continues to show resilience and adaptability, supported by strategic policies, a stable investment environment, and sustained growth in key non-oil sectors. The banking sector has maintained strong capital buffers, providing a solid foundation for growth. The UAE’s forward-looking economic policies, coupled with increasing foreign direct investment and an average capital adequacy ratio of 18.3%, ensures continued progress despite global economic shifts.

Mashreq’s financial results reflect our alignment with the UAE’s broader economic growth. Our focus on innovation, sustainable finance, and strategic market positioning keeps us ahead, seizing emerging opportunities while managing risks effectively. As we diversify revenue streams, enhance customer journeys, and lead in digital transformation, our commitment to long-term value creation remains steadfast. We are proud of our achievements and remain focused on delivering our strategic priorities, supporting the nation’s growth and prosperity.”

Ahmed Abdelaal, Group Chief Executive Officer of Mashreq said:

“Our strong performance in the first nine months of 2024 underscores Mashreq’s strategic direction and operational resilience in navigating dynamic market conditions. Profit before tax rose 9% to AED 6.5 billion, reflecting the success of our growth story combined with cost discipline and sound risk management. Non-interest income now accounts for 30% of total operating income, showcasing our ability to generate value beyond traditional banking and diversify our revenue streams.

This year has been pivotal in expanding our footprint and enhancing digital capabilities. We launched the fully digitized NEO CORP platform for our wholesale banking customers clients in Bahrain, Kuwait, with Qatar to follow very soon, as a part of the initial roll out and made our first corporate banking loan transaction in the UK, strengthening our presence in key markets.

Our focus remains on digital transformation, operational resilience, and client-centricity. The growth of NEO CORP and record activations on NEO BIZ highlight our leadership in corporate and business banking.

Sustainability remains a core focus of our strategy, apart from growing our sustainable financing we witnessed the completion our Climb2Change initiative phase 3 in Pakistan. We are honored that Forbes has recognized this initiative as the most sustainable global initiative in the Middle East banking sector.

As we look ahead to 2025, we will continue to deliver value to our clients and stakeholders through innovation and commitment to our strategy, ensuring Mashreq’s leadership in an ever evolving financial landscape.”