Mashreq, one of the UAE’s leading National financial institutions reported a net profit of Dh 820 million for the year ended 31st December 2011 on operating income of Dh3.9 billion over the same period.
Mashreq’s total assets witnessed a moderate decline of 6.6%, reaching Dh79.2 billion compared to Dh 84.8 billion at the end of 2010, due to the bank’s balance sheet management strategy. The bank continued to maintain high liquidity. The liquid assets of Dh24.9 billion led to a healthy liquid to total asset ratio of 31% as of December 31st, 2011.
In addition to specific provisions, Mashreq maintains a healthy general provision (collective impairment allowance) which at year end stood at 2% of net loans and advances.
As a result of proactive risk management, Loans & Advances reported Dh37.7 billion, a decrease of 8.5% from Dh 41.2 billion at the end of 2010.
“The 2011 annual financial results reflect our policy of balancing prudence with profitability. Although 2011 was a challenging year for the Region, we continue to maintain high levels of capitalization and liquidity and remain fully committed to the markets across the GCC,” Abdul-Aziz Al Ghurair, Chief Executive Officer of Mashreq, said.
Given the elevated level of liquidity, Mashreq could afford to rationalize its liability structure by shedding some high-cost deposits, leading to an 11.4% reduction from December 2010 to Dh 45.4 billion. However, the bank continues to maintain a robust loan-to-deposit ratio of 83% as at December 2011.
“Our single minded goal is to deliver sustainable financial results while adapting to rapidly changing market conditions by focusing on customer centricity across our businesses. Meeting and exceeding the needs of our customers is the corner stone of our business philosophy,” Abdul-Aziz Al Ghurair added.
The bank continued to maintain a very healthy capital adequacy ratio which stood at 22.6% as of December 2011, while the Tier 1 ratio went up to 16.2% for the same period.