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Mashreq reports a Net Profit of AED 1.6 Billion on the back of a
96% increase in operating profits for the first quarter 2023
Mashreq announces the financial results for Q1 2023 demonstrating a robust performance
and crossing the AED 200 billion in total assets milestone, as outlined below:
Key highlights:
1. Strong Growth in Operating Income & Net Profit
96%
a) Operating profit at AED 1.8 billion represents a 96% increase
compared to Q1 2022 driven by healthy operating income growth Operating profit growth
in the UAE and across other countries. Improved efficiency – cost
to income ratio stands at 30.2% in Q1 2023 compared to 40.3% in
Q1 2022
1.6 billion
b) Mashreq’s non-interest income to operating income ratio continues to
remain one of the industry’s best at 30.7% Net profit (AED)
c) Credit cost decreased by 58% year on year. This coupled with a solid
operating income growth allowed Mashreq to post a strong Net Profit
of AED 1.6 billion in Q1 2023
28.4%
Return on equity
2. Stable Growth in the Loan Portfolio & Healthy Asset Quality
a) Total Loans and Advances increased by 5.6% year-on-year and
stands at AED 91.1 billion 3.4%
b) Loan-to-Deposit ratio was at 75.8% at the end of March 2023
Return on assets
(79.4% in December 2022)
c) Non-Performing Loans to Gross Loans ratio declined to 1.9% as of
end of March 2023 (2.2% as of December 2022)
4.0%
Net interest margin
3. Healthy Liquidity & Capital Position
a) Growth of 5.6% YTD in Customer deposits to reach AED 120.2 billion
b) Liquid Assets ratio stood at 35.6% as of March 2023 (33.5% in
17.4%
December 2022)
c) Capitalization levels have improved significantly with the Capital Capital adequacy ratio
adequacy ratio at 17.4% and Tier 1 Capital ratio at 15.1% as of
March 2023
30.2%
4. Enhanced Credit Environment
Cost income ratio
a) Impairment allowance reduced significantly to AED 96 million in Q1
2023 on the back of improved asset quality and represents only 0.1%
of net loans
b) Total provision for loans and advances reached AED 4.9 billion and 1.9%
coverage ratio improved to 231.3 % as on 31st March 2023 (190.8%
NPL gross loans ratio
in December 2022)
Management Discussion & Analysis Report | 2H.E. Abdul Aziz Al Ghurair
Chairman of Mashreq, said:
“Owing to robust growth in operating income, enhanced efficiencies, and improved risk position, Mashreq
concluded the first quarter of 2023 with outstanding financial results, demonstrating nearly double
year-on-year operating profits and crossing the AED 200 billion in total assets milestone.
As a challenger bank, Mashreq actively participated in the UAE’s innovation ecosystem during Q1, becoming
a founding member of the DIFC’s venture-building program, Launchpad. The Bank’s performance was
further supported by the introduction of numerous platforms and digital journeys, both domestically and
internationally, across retail, business, and corporate and investment banking.
The effectiveness of Mashreq’s digital strategy is evident through the substantial increase in customer
deposits, improved cost-to-income ratio, and remarkable net profit growth. These achievements have
been driven by various factors, such as enhanced asset quality, a decrease in non-performing loans, and a
favorable non-interest income to operating income ratio.
Moreover, the progress made in product expansion and geographic reach during Q1 marks a crucial milestone
for the Bank, with the approval of a digital license in Pakistan and considerable expansion in Egypt. Mashreq’s
performance in these and other international markets led to numerous awards in Q1, not only in the UAE but
also in Egypt, Kuwait, and Qatar.
Mashreq places a strong emphasis on sustainability, especially as the UAE is set to host COP 28, further
highlighting the nation’s commitment to environmental and social responsibility. In Q1, the Bank made
significant strides in its sustainability journey, obtaining third-party assurance for its Sustainability Report
in line with international standards.
We foresee that through our proactive involvement in the innovation ecosystem, technology-driven
customer personalization, and an unwavering focus on efficiencies, Mashreq will persist in supporting the
UAE economic growth across economic cycles and amidst global uncertainties throughout 2023.”
AED 200 Bnn Crossed total assets milestone
Management Discussion & Analysis Report | 3Ahmed Abdelaal
Group Chief Executive Officer, said:
“I am delighted to announce Mashreq’s strong financial performance in Q1 2023, a testament to our ability
to adapt to changing market conditions and our unwavering commitment to delivering sustained value to
our stakeholders. Our focus on healthy operating income growth and enhanced efficiency has resulted in
an impressive operating profit growth of 96% compared to Q1 2022. We have maintained a strong liquidity
and capital position, with customer deposits growing by 5.6% YTD to reach AED 120.2 billion, and our
non-interest income to operating income ratio remaining high at 30.7%, showcasing our ability to create
diversified income streams.
We continue to achieve stable growth in our loan portfolio, with 5.6% YoY increase in total loans and
advances to reach AED 91.1 billion, while maintaining a prudent approach to risk management as reflected in
our reduced impairment allowance and declining non-performing loans to gross loans ratio. Our commitment
to sustainability has been further strengthened through third-party assurance on our sustainability report
in accordance with AA1000AS standards, and our participation in the World Green Building Council’s MENA
net zero collaborators program, demonstrating our dedication to creating a sustainable future.
Looking ahead, we remain focused on developing and building experiences that positively impact our clients’
everyday lives, beyond just products and services. We recognize that our employees are the backbone of
our organization and we are committed to investing in their growth and development, enabling them to
provide exceptional service to our customers. We are excited to continue on this journey of growth and
success, and remain dedicated to delivering exceptional value to our customers, shareholders, and the
wider community.”
96% Operating profit growth
28.4% Return on equity
30.2% Cost income ratio
Management Discussion & Analysis Report | 4Q1 2023 Financial Highlights
Q1 2023 Financial Highlights Quarterly Trend
Q1 Δ% Q1 Q4 Q1 Δ%
Income statement (AED mn) 2023 2022 YoY 2023 2022 2022 QoQ YoY
Net Interest Income & Income
1,746 828 111.0 1,746 1,482 828 17.8 111.0
from Islamic Financing
Fee and commision 583 356 63.7 583 407 356 43.4 63.7
Investment Income 18 18 3.4 18 65 18 (71.7) 3.4
Insurance, FX & Other Income 172 302 (43.0) 172 199 302 (13.5) (43.0)
Total Operating Income 2,520 1,504 67.6 2,520 2,153 1,504 17.0 67.6
Operating Expenses (761) (606) 25.6 (761) (902) (606) (15.7) 25.6
Operating Profit 1,759 898 95.9 1,759 1,251 898 40.6 95.9
Impairment Allowance (96) (228) (57.9) (96) (3) (228) 2,704.8 (57.9)
Tax Expense (28) (30) (5.1) (28) (105) (30) (73.0) (5.1)
Non-Controlling Interest (24) (27) (10.7) (24) (16) (27) 49.1 (10.7)
Net Profit for the Period 1,610 612 163.0 1,610 1,126 612 43.0 163.0
EPS [AED] 8.03 3.05 163.0 8.03 5.61 3.05 43.0 163.0
Mar Mar Δ% Mar Dec Mar Δ%
Balance Sheet (AED mn) 2023 2022 YoY 2023 2022 2022 YTD YoY
Total Assets 201,233 182,581 10.2 201,233 197,245 182,581 2.0 10.2
Loans and Advances 91,109 86,295 5.6 91,109 90,303 86,295 0.9 5.6
Customer Deposits 120,162 104,228 15.3 120,162 113,806 104,228 5.6 15.3
Shareholder’s Funds* 23,314 20,369 14.5 23,314 23,599 20,369 (1.2) 14.5
Mar Mar Δ bps Mar Dec Mar Δ bps
Key Ratios (%) 2023 2022 YoY 2023 2022 2022 YTD YoY
CAR (Capital Adequacy ratio) 17.43 14.00 342 17.43 16.02 14.00 141 342
Tier 1 Ratio 15.09 12.86 223 15.09 13.71 12.86 138 223
Loan-to-Deposits 75.82 82.79 (697) 75.82 79.35 82.79 (353) (697)
Return-on Assets** 3.36 1.48 188 3.36 2.10 1.48 126 188
Return-on-Equity** 28.39 12.06 1,633 28.39 17.54 12.06 1,085 1,633
* Equity attributable to owners of parent including noteholders of the Group
** Annualized
Management Discussion & Analysis Report | 5Exhibits
+67.6%
2,520
Operating Income (AED Mn)
1,504
Q1 2022 Q1 2023
Loans (AED Mn) Deposits (AED Mn)
+0.9% +5.6%
90,303 91,109 120,162
113,806
Dec’22 Mar’ 23 Dec’22 Mar’ 23
Capital adequacy ratio (%) Tier 1 ratio (%)
17.4
16.0 15.1
15.2 14.0
13.7
14.0 12.9
13.6 12.4
Mar’ 22 Jun’ 22 Sep’ 22 Dec’ 22 Mar’ 23 Mar’ 22 Jun’ 22 Sep’ 22 Dec’ 22 Mar’ 23
Coverage ratio (RHS %) NPL ratio (LHS %)
%
8 131.6 132.1 231.2 250
149.7 190.8
4.6 4.6 200
6
3.6
150
2.2
4 1.9 100
2 50
0 0
Mar’ 22 Jun’ 22 Sep’ 22 Dec’22 Mar’ 23
Management Discussion & Analysis Report | 6Q1 2023 Awards
Forbes Regions Most Valuable The Economic Times
Banks 2023 list
Best Organization for Women 2023 -
Mashreq is among the Top 50 most valuable
Mashreq Global Network, India
banks in the MENA region
Award by Visa
Euromoney Trade Finance 2023
Best Client Experience’ for achieving the
Market Leader in the UAE
highest transaction approval rates in the UAE
for the year of 2022.
Best Service in Bahrain
Best Service in Bangladesh
Best Service in Kuwait Bonds, Loans & ESG Capital Markets
Africa Award
Best Service in Qatar Financial Institutions Debt House of the Year
Best Service – Products – Africa
Best Service - Industrial Goods – in Middle East
2023 Middle East & North Africa
Stevie® Awards
Best Service - Retail Providers – in Middle East
Gold Stevie Trophy for Innovation
Best Service – Products – In Egypt
Management in the Financial Industries
MENA Banking Excellence Awards 2023
Best Private Bank – UAE
Management Discussion & Analysis Report | 7For media enquiries, please contact:
Rana AlBorno
Public Relations, Mashreq
Tel: +971 4 6083629
Email: RanaAlB@mashreq.com
For investor relations enquiries, please contact:
Ali Zaigham Agha
Investor Relations, Mashreq
Tel: 04 2077543
Email: AliAgha@mashreq.com
Management Discussion & Analysis Report | 8

Sentiment: positive