Dubai’s Mashreq fourth quarter net profit tumbles 21 pct
Banks facing stronger headwinds as a sag in oil prices feeds through to higher levels of bad loans and squeezed net interest margins
Mashreq, Dubai’s third-biggest bank by assets, reported a 20.7 percent fall in fourth-quarter net profit on Wednesday, its sixth quarter in a row of falling profits, as fees and commission slipped and impairment allowances jumped.
The lender made a net profit of dirhams $120 million (Dh 441 million) in the three months to Dec. 31, it said in a statement, down from 556 million dirhams recorded for the corresponding period of 2015.
Banks in the UAE are facing stronger headwinds as a sag in oil prices feeds through to higher levels of bad loans and squeezed net interest margins.
Mashreq said it made impairments for bad loans worth Dh 425 million in the fourth quarter, up 34 percent from the same three months of last year.
Loans and advances at the end of December were 1.4 percent up on the same point of 2015 at 61 billion dirhams, while deposits over the same period grew 4.6 percent to Dh77 billion.
Net interest income and net income from Islamic products rose 2.3 percent from a year earlier to Dh891 million, while net fee and commission income dropped 8.2 percent to Dh392 million, the bank said.
For the full-year of 2016, the bank reported a net profit of Dh1.9 billion, down from Dh2.4 billion a year earlier.