Mashreq Achieves Historical Financial Milestone in 2023, with its net profit soaring by an impressive 130% to reach an unprecedented AED 8.6 billion

• Net Interest Income Skyrockets: Witnessed an impressive 69% surge, fuelled by extraordinary growth in the balance sheet and solid client margins. Concurrently, non-interest income witnessed a robust increase of 13% year-on-year.
• Dynamic Expansion of Balance Sheet: Marked by a significant 25% year-on-year escalation in Loans and Advances, coupled with a substantial 29% boost in customer deposits, showcasing a strong upward
• Financial Strength and Efficiency: The Capital Adequacy Ratio stands at a notable 16.5% (excluding proposed dividend), highlighting Mashreq’s robust financial resilience in a competitive market. Moreover, a stellar Return on Equity (ROE) of 34.3% and an efficient Cost-Income Ratio of 30.9% reflect Mashreq’s exceptional financial performance throughout 2023.

Dubai, UAE; 29th January 2024: Mashreq proudly announces its financial results for the fiscal year 2023, showcasing an unwavering commitment to and achievement of a robust and sustainable growth trajectory. The company’s dedication to client centrism and operational excellence is evident in the noteworthy Earnings per Share (EPS) of AED 42.82, a testament to its resilience and ability to create substantial value for shareholders.

Key highlights:

1. Operating Income & Net Profit
   • Mashreq’s Net Profit has surged to a record AED 6 billion for FY 2023, a substantial increase of 130% year-on-year. The increase in operating income and net profit is primarily attributed to net interest income soaring by 69% year-on-year. The main drivers are significant business growth with robust client margins, the continuation of the prevailing high-interest rate environment as well as positive one-offs relating to loan loss provisioning. Additionally, our non-interest income has reached AED 3.1 billion, marking a notable 13% year-on-year growth in FY 2023.
   • The bank has demonstrated positive jaws of 4% in FY 2023, and the Cost-to-Income ratio has improved by over 8% year-on-year. This indicates strong business performance with effective control over operating costs while enabling continued investments in enhancing our client experience, risk management, and supporting business growth.
   • Operating profit has surged from AED 4 billion to AED 7.5 billion in FY 2023, representing almost 70% increase compared to the same period in 2022.
   • The allowance for impairments has experienced a net release of AED 1.4 billion, driven by prudent risk management, high recoveries from Non-Performing Loans (NPLs) and a one-off release of the General Provision.
   • Return on Equity (ROE) at record-high of 3% in FY 2023, doubling compared to FY 2022, while the cost-to-income ratio decreased to 30.9%.

2. Liquidity & Capital position
   • High Liquidity denoted by a Liquid Assets ratio of 33.6% and an efficient Liquidity Coverage Ratio of 134% as of December 2023
   • Capitalisation level (excluding proposed dividend) remains robust with the Capital adequacy ratio at 5%, Tier 1 Capital ratio at 14.3% and CET1 ratio at 13.7% as of December 2023.

3. Credit Environment & Asset Quality
   • Overall loan portfolio quality has improved significantly with gross impairments to gross advances at just 0.3% (0.9% in FY 2022)
   • The Non-Performing Loans to Gross Loans ratio declined to 3% as of end of December 2023 (2.2% as of December 2022) and is one of the lowest in the market.
   • The Coverage ratio has improved to 5% as on 31st December 2023 (190.8% in December 2022)

H.E. Abdul Aziz Al Ghurair, Chairman of Mashreq, said: “In recent years, our track record of consistent performance and profitability improvement has been nothing short of impressive. Our franchise continues to yield outstanding results, bolstered by the addition of a substantial number of new clients and the deepening of existing relationships across the bank. This remarkable achievement mirrors the nation’s significant economic expansion and the resilience and dynamic growth of the UAE’s financial services, setting a precedent in the global banking arena.

Ahmed Abdelaal, Group Chief Executive Officer, said: “Our performance this year has truly been exceptional, serving as a testament to the success of our strategic direction within the ever-evolving global economic and political landscape. As a modern, digitally empowered challenger bank, we have firmly cemented our position in the market. Our strategy and robust operational execution have been pivotal in achieving this growth which spans across all businesses and geographies. Our consistent recognition by prestigious institutions like Euromoney Market Leaders across local, regional, and international levels, driven by votes from our clients, reaffirms our commitment to delivering superior customer experiences and pioneering innovative technology.”