Mashreqbank announces 25% rise in net profits
UAE bank’s annual results show profits topping Dhs 500 million.
Mashreqbank announced today (Jan 29) that its profits had soared 25% to reach Dhs 504 million for the year ending December 31, 2002. The bank generated gross income of Dhs 1.235 billion, an 8.4% increase over 2001.
“Our outstanding performance is in line with our three-year strategic plan, which focuses on effective balance sheet management and unrivalled, value added services for our customers,” said Abdul Aziz Al Ghurair, Mashreqbank CEO.
The bank says the results are a vindication of its three-year ‘adding value’ strategy, which was launched in 2002. During that period, the bank has sought to increase its loan portfolio and its fee income, which now generates 45% of its overall income.
Al Ghurair said that as the bank had sought to significantly increase its loan portfolio, it had put in place stringent procedures to try to assess the suitability of borrowers and reduce the likelihood of bad loans.
Measures include the profiling of potential retail borrowers by nationality and occupation and the installation of modeling software to try to predict consumer habits. “We have made a big investment in a retail credit lending system,” said Al Ghurair. “We now have centralised credit approval.”
On the corporate side, the bank has adopted a policy of lending to a wide variety of industrial sectors. Strict limits are also set on the amount lent to any particular sector, so as to reduce exposure to industry specific shocks.
Mashreqbank has also looked to expand regionally and internationally through commercial and infrastructure projects such as the Alexandria Gas Network scheme in Egypt, and along with several new branches in the UAE has opened up a second branch in Qatar.
“Looking forward, I see challenging times given the difficult political and economic situation globally and in the region. We are, however, on course to achieve our goals for 2003 as well, ” said Al Ghurair.