26 October 2023Mashreq’s Net Profit surges 122% to AED 5.8 billion in the first
9 months of 2023 driven by robust income growth and low risk cost
• Net interest income surges by 82%, benefiting from balance sheet growth, healthy client margins, while non-interest income
shows a strong increase of 8.1% year on year.
• Balance sheet growth is fuelled by Loans and Advances growth (9.9% year to date) and customer deposits growth (16.7% year to date).
• Capital adequacy ratio of 18.6% reaffirms robust capital position in a dynamic market, while ROE increases to 32.1%.
Mashreq announces its financial results for 9M 2023 continuing its strong
sustainable growth trajectory and enhancing shareholder value with an 122%
Earnings per Share of AED 28.75. YoY Net Profit Growth
Key highlights:
5.8 billion
1. Operating Income & Net Profit
Net Profit (AED)
• The increase in operating income and net profit is primarily attributed to a significant
82% increase in net interest income. This growth is a result of several factors,
including the expansion of our balance sheet, healthy client margins, and the prevailing 18.6%
high-interest rate environment. Additionally, our non-interest income has reached
Capital Adequacy Ratio
AED 2.3 billion, marking a notable 8.1% year-on-year growth in 9M 2023.
• The bank has demonstrated a positive jaws ratio of 34.8% in 9M 2023, and the
Cost-Income ratio has improved by over 8% year-on-year. This indicates effective
73.1%
control over operating costs while enabling continued investments in enhancing our
client experience, risk management and supporting business growth.
Operating Profit Growth
• Operating profit has surged from AED 3.2 billion to AED 5.6 billion in 9M 2023,
representing a remarkable 73% increase compared to the same period in 2022.
• The allowance for impairments has experienced a net release of AED 341 million, 9.9%
driven by a decrease of 69% year-on-year in low-risk charges, amounting to
AED 244 million. YTD Loans Growth
• Mashreq’s Net Profit has soared to AED 5.8 billion for 9M 2023, a substantial
increase of 122% year-on-year. This performance is attributed to our successful
16.7%
growth strategy, commitment to customer excellence, strong operating performance,
efficient cost management, and prudent risk management capabilities. YTD Customer Deposits Growth
(CASA 63%)
• Return on Equity (ROE) at record-high of 32.1% in 9M 2023, doubling compared to
9M 2022.
2. Liquidity & Capital position 1.5%
• High Liquidity denoted by a Liquid Assets ratio of 32.3% and an efficient Liquidity NPL Gross Loans Ratio
Coverage Ratio of 126.6% as of September 2023
• Capitalization level remains robust with the Capital adequacy ratio at 18.6%, Tier 1
Capital ratio at 16.3% and CET1 ratio at 15.6% as of September 2023 32.1%
Return on Equity
3. Credit Environment & Asset Quality
• Overall loan portfolio quality has improved significantly with gross impairments to 3.8%
gross assets at just 0.2% (0.8% in 9M 2022)
• The Non-Performing Loans to Gross Loans ratio declined to 1.5% as of end of Return on Assets
September 2023 (2.2% as of December 2022) and is one of the lowest in the market.
• Total provision for loans and advances reduced to AED 4.0 billion in September 2023
29.1%
from AED 4.8 billion in December 2022 and coverage ratio improved to 222.9% as
on 30th September 2023 (190.8% in December 2022)
Cost to Income Ratio
Management Discussion & Analysis Report | 2H.E. Abdul Aziz Al Ghurair
Chairman of Mashreq
“The UAE banking sector continues to demonstrate remarkable resilience and growth,
laying a strong foundation for the entire financial landscape of the country. Our recent
achievement, a remarkable 122% year-on-year surge in net profits, stands as a testament
to Mashreq’s enduring strengths and forward momentum. However, our vision extends
beyond numbers. At Mashreq, we are firm in spearheading the region’s sustainability
journey by offering tailored financial solutions that catalyse the transition to a greener
economy, paving the way for the UAE’s goal of Net Zero by 2050. Through our association
with COP28, we reiterate our dedication to combating climate change and championing a
sustainable tomorrow. It is a time of reinvention, of looking ahead, and ensuring that as
leaders in the banking industry, we not only drive profits but also champion the cause of a
sustainable future for all.”
Management Discussion & Analysis Report | 3Ahmed Abdelaal
Group Chief Executive Officer
“Mashreq’s remarkable financial performance this year is a clear reflection of our relentless
commitment to innovation and putting our customers first. The significant growth in net
profit to AED 5.8 billion in the third quarter, spurred by an 82% increase in net interest
income, underlines our strength and adaptability in an ever-changing financial landscape.
Internationally, we continued to see the benefits of our diversified business model and
strong balance sheet growth and our digital strides in Pakistan and licensing in Oman
usher in a new era of exciting global growth. Our digital transformation continues to gain
momentum with strategic partnerships with the likes of Alipay through NeoPay, enhancing
our position in the digital banking revolution.
However, our commitments extend beyond business. Through our alliance with the
Science-Based Targets Initiative (SBTi), we are expanding our environmental responsibility,
solidifying our position at the frontline of industry sustainability, and underlining our
pledge to a Net-Zero future.
Looking ahead, our strategy is multifaceted. Beyond financial investment, we aim to
elevate the customer experience, fortify our security measures with cutting-edge fraud
prevention, and optimize operations through automation. We are enthusiastic about
amplifying our digital capabilities, especially by harnessing AI and nurturing flagship digital
platforms like Neo and NeoBiz. Our journey has been commendable, but our vision remains
expansive, awaiting the countless possibilities the future holds.”
Management Discussion & Analysis Report | 49M 2023 Financial Highlights
Quarterly Trend
Income statement (AED mn) 9M Δ% 3Q 2Q 3Q Δ%
2023 2022 YoY 2023 2023 2022 QoQ YoY
Net Interest Income & Income
5,621 3,088 82.0 2,005 1,870 1,246 7.2 60.9
from Islamic Financing
Fee and commission 1,195 1,040 14.9 319 293 308 8.6 3.5
Investment Income 1 27 (97.9) (3) (15) 23 (78.4) NM
Insurance, FX & Other Income 1,090 1,048 4.0 460 458 429 0.3 7.2
Total Operating Income 7,907 5,203 52.0 2,780 2,607 2,005 6.7 38.7
Operating Expenses (2,304) (1,967) 17.1 (853) (690) (728) 23.6 17.2
Operating Profit 5,603 3,236 73.1 1,927 1,917 1,277 0.5 50.9
Impairment Allowance 341 (471) NM 395 43 (30) 826.2 NM
Tax Expense (111) (94) 17.6 (48) (34) (33) 42.9 46.3
Non-Controlling Interest (65) (73) (11.0) (22) (19) (24) 13.7 (10.5)
Net Profit for the Period 5,768 2,598 122.0 2,252 1,906 1,189 18.1 89.3
EPS [AED] 28.75 12.95 122.0 11.23 9.50 5.93 18.1 89.3
Sep Sep Δ% Sep Jun Dec Δ%
Balance Sheet (AED mn) 2023 2022 YoY 2023 2023 2022 QoQ YTD
Total Assets 218,342 187,587 16.4 218,342 210,964 197,245 3.5 10.7
Loans and Advances 99,275 91,326 8.7 99,275 94,956 90,303 4.5 9.9
Customer Deposits 132,864 109,430 21.4 132,864 126,778 113,806 4.8 16.7
Shareholder’s Funds* 26,983 22,111 22.0 26,983 25,260 23,599 6.8 14.3
Sep Sep Δ bps Sep Jun Dec Δ bps
Key Ratios (%) 2023 2022 YoY 2023 2023 2022 QoQ YTD
CAR (Capital Adequacy Ratio) 18.56 15.18 338 18.56 18.00 16.02 56 254
Tier 1 Ratio 16.30 14.03 227 16.30 15.71 13.71 60 259
CET 1 Ratio 15.63 13.32 231 15.63 15.01 13.01 61 262
Loan-to-Deposits 74.72 83.46 (874) 74.72 74.90 79.35 (18) (463)
Return-on-Assets** 3.83 2.01 183 3.83 3.58 2.10 25 173
Return-on-Equity** 32.07 16.78 1,529 32.07 30.22 17.54 184 1,453
* Equity attributable to owners of parent including noteholders of the Group
** Annualised
Management Discussion & Analysis Report | 5Exhibits
Operating Income (AED Mn) Net Profit (AED Mn)
+52.0% +122.0%
7,907 5,768
5,203
2,598
9M 2022 9M 2023 9M 2022 9M 2023
Loans (AED Mn) Deposits (AED Mn)
+9.9% +16.7%
132,864
99,275
90,303
113,806
Dec’22 Sep’23 Dec’22 Sep’23
Capital Adequacy Ratio (%) CET 1 Ratio (%) Tier 1 Ratio (%)
18.6 16.3
18.0
17.4 15.1 15.015.7 15.6
16.0 14.4
15.2 14.0 13.7
13.3
13.0
Sep’22 Dec’22 Mar’22 Jun’23 Sep’23 Sep’22 Dec’22 Mar’22 Jun’23 Sep’23
Coverage Ratio (RHS %) NPL Ratio (LHS %)
%
8 250
237.6 222.9 200
6 231.2
190.8 150
149.7
4
100
3.6
2 2.2 1.9 1.7 1.5 50
0 0
Sep’ 22 Dec’22 Mar’23 Jun’ 23 Sep’ 23
Management Discussion & Analysis Report | 69M 2023 Awards
World Finance Great Place to Work for the second
consecutive year
• Best Retail Bank in the UAE
• Best Private Bank • Mashreq Global Network in India
The Digital Banker Middle East & Africa Finnovex Middle East Awards 2023
Retail Banking Innovation Awards 2023
• Excellence in Neo Banking
• Best Hybrid Wealth Management
Offering
• Outstanding Digital Transformation by
a Islamic Retail Bank The Banker – Investment Banking
• Best Islamic Loan Offering of the Year Award 2023
• Best Islamic Retail Bank
• Best Customer Centric Business Model • Syndicated Loans
• Best Digital Bank
Finance Derivative
The European Global Banking & Finance
• Best Retail Bank UAE 2023
Awards 2023 • Best Customer Centric Retail Bank
UAE 2023
• Best Bank for sustainable Finance 2023
• Best Bank For Online Product Offerings
• Best Performing Private Bank 2023
UAE 2023
• Most Innovative Digital Bank for Business
• Best Bank For Savings Solution Provider
Banking 2023
UAE 2023
• Best SME Bank UAE 2023
UAE IAA
• Leading Practices in Internal Audit The Asian Banking & Finance Retail Banking
Awards 2023
• Digital Banking Initiative of the Year – UAE
The Banker Top 100 Arab Bank Rankings • Service Innovation of the Year - UAE
• New consumer lending product of
• Mashreq Bank ranked 1st Best Performing
the year – UAE
Bank in the UAE
• Wealth Management Platform of
• Mashreq Bank ranked 1st in the Middle East
the Year - UAE
for Pre-Tax profit growth
• Mashreq Bank ranked 1st in the Middle East
for Return On Capital over 15%
Management Discussion & Analysis Report | 79M 2023 Awards
Forbes Middle East Euromoney Awards for Excellence
• Top 100 listed companies in the Middle • Best Digital Bank in the Middle East
East for 2023 • Best Bank for Digital Solutions
LEED Gold Certified by the U.S. Green The Asian Banking & Finance Retail Banking
Building Council Awards 2023
• Wealth Management Platform of
the Year - UAE Best Bank for Digital
Solutions
International Banker Awards
• Best Banking CEO of the Year Middle East
2023
• Best Commitment to ESG Principles UAE LEED Zero Energy certification by the U.S.
2023
Green Building Council
Infosys Finacle Innovation Awards 2023
MEED’s MENA Banking Excellence
• Business Model innovation - Federal- Awards 2023
Mashreq Neo partnership for end-to-end
digital NR onboarding journey • Best Private Bank UAE
Global Business Magazine
MEA Finance Summit & Awards 2023
• Best Mobile Banking Application UAE 2023
• Best Innovation in Retail Banking’
• Most Innovative Corporate Bank UAE 2023
• Digital Banking Innovation of the
• Best Online Services Bank UAE 2023
Year - UAE’.
Global Private Banking Innovation Global Finance – The Innovators 2023
Awards 2023 • Most Innovative Bank in the Middle East
• Best Innovation Labs for 2023 - Mashreq
• Best Private Bank for Funds
Wholesale Digital Innovation Lab
• Best Private Bank – UAE
• Best Family Office Offering
Management Discussion & Analysis Report | 89M 2023 Awards
EMEA Finance Achievement Awards 2022 Euromoney Islamic Finance Awards 2023
• Best restructuring house in the • Mashreq Al Islami - Best Islamic Digital
Middle East Bank- Global
Wealth Tech Awards 2023 MENA Banking Excellence Awards 2023
• Best private bank for digital customer • Best Private Bank – UAE
service in the Middle East
• Most Innovative Client Lifecycle
Management of the Middle East
Bonds, Loans & ESG Capital Markets
Africa Award
2023 Middle East & North Africa • Financial Institutions Debt House
of the Year
Stevie® Awards
• Gold Stevie Trophy for Innovation
Management in the Financial Industries
Award by Visa
• ‘Best Client Experience’ for achieving the
Forbes Regions Most Valuable Banks highest transaction approval rates in the
UAE for the year of 2022.
2023 list.
• Mashreq is among the Top 50 most
valuable banks in the MENA region
The Banker Magazines “Deals of the Year
Awards 2023”
Euromoney Trade Finance 2023 • Deal of the Year - Africa(Nigeria) - FIG -
African DFI debut bond issue
• Market Leader in the UAE
• Deal of the Year - Middle East - FIG
• Best Service in Bahrain
-Mashreq’s inaugural Tier 2 issuance
• Best Service in Bangladesh
• Deal of the Year - Middle East - High Yield
• Best Service in Kuwait
and Leveraged Finance -AIR’s $525m
• Best Service in Qatar
syndicated term facilities
• Best Service – Products – Africa
• Deal of the Year - Middle East -
• Best Service - Industrial Goods – in
Restructuring - Gargash’s refinancing,
Middle East
repricing and restructuring solution
• Best Service - Retail Providers – in
Middle East
• Best Service – Products – In Egypt
Management Discussion & Analysis Report | 9For 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 | 10

Sentiment: neutral