Mashreq Annual Results 2006
31 January 2007
Mashreqbank Group announced its yearly results for the year ending 2006 declaring net profit of AED 1.57 billion.
Disclosing the financial results for the year, Mr. AbdulAziz Al-Ghurair, CEO of Mashreqbank stated: “It was a year of all round achievements for the bank. Total Assets grew by 22 per cent to reach AED 56.7 Billion in 2006 from AED 46.5 Billion in 2005. Loans and Advances were up by 28 per cent from AED 22.3 Billion in 2005 to AED 28.6 Billion in 2006. Customer deposits witnessed an increase of 13 per cent from AED 30 Billion in 2005 to AED 33.9 Billion in 2006”.
“Bank’s net interest income is up by 15% and crossed the 1 billion mark to reach AED 1.118 billion. However, the total income of the bank in 2006 at AED 2.827 Billion, lower by 9% compared to last year achievement of AED 3.107 Billion. This is primarily due to the decline in other income which is caused by decrease in the investment income of our subsidiary Oman Insurance Company. Therefore, the bank’s net profit for 2006 is 1.57 Billion 10% lower from last year’s record earnings of 1.74 Billion in 2005. Earnings per share for 2006 is AED 18.13, compared to AED 20.08 in 2005.
“I had advised from the start of 2006 that with soaring stock market and high IPO activities in 2005 was an extra-ordinary year for the UAE financial sector which was not sustainable during 2006. Mashreqbank benefited from that year by achieving an extra-ordinary 132 per cent increase in profit. Mashreqbank 2006 results are normal and healthy compared to the performance of the last five years and will be sustained over the coming years”. Explained Mr. AbdulAziz
Investment banking team successfully closed a number of flagship transactions in the year 2006 including the USD 600 Million syndicated loan lead arranged for Dubai International Capital and USD 60 Million syndicated facility for i2 Itsalat.
Mashreqbank was also appointed Mandate Lead arranger for several high profile project finance transactions in the region, including the USD 1.49 Billion facility for Emirates Sembcorp Water & Pump, USD 2.5 Billion facility for Equate Pertrochemicals, Kuwait, USD 2.5 Billion facility for Orascom Telecom, Egypt and USD 2 Billion facility for Reliance Pertroleum, India.
Mashrebank became the first UAE bank to receive Dubai Financial Services Authority (DFSA) license to operate as an authorized firm from the DIFC. The license enables Mashreq Capital, a wholly owned subsidiary of the bank, to provide a number of investment and brokerage services for investors such as trading on the DIFC stock market.
Mashreq Capital launched the first specialist emerging debt fund at DIFC. Known as the “Emerging Market Credit Opportunities Fund”, the first specialist fixed income hedge fund at the DIFC.
Mashreqbank launched two more funds “The Makaseb Kuwait Equity Fund” and the “Makaseb Oman-Bahrain Equity Fund” providing greater flexibility to investors to access the dynamic and fast growing Gulf economies.
Mashreq Securities, the brokerage arm of the bank also opened two VIP branches, one in DIC and one in Abu Dhabi. Mashreq Securities also introduced its state-of-art online trading facility to its brokerage customers.
Badr Al Islami, a finance company and fully owned subsidiary of the bank with a capitol of AED 500 Million opened its first branch on Airport Road, in Dubai in December 2006. The finance company will cater to the Islamic banking needs of both Retail and Corporate customers.
Fitch Ratings upgraded Mashreqbank’s Issuer Default Rating (IDR) from “A-“ to “A” Short Term rating from “F2” to “F1” and Support from “2” to “1” with Stable outlook. Capital Intelligence also raised the foreign currency short term rating of the bank from A1 to A2 with a stable outlook.
In 2006 MashreqBank was named as the ‘best bank in the UAE 2006’ by the leading international finance journal, Euromoney Magazine. MashreqBank was also selected as the ‘bank of the UAE in 2006’ by Emerging Markets Magazine.
Mashreqbank launched a prepaid MasterCard called “Mashreqbank UAE Gate Prepaid Master Card”, the first of its kind with an eGate card with payment functionality. Mashreqbank’s eGate prepaid Master Card received MasterCard Product Award recognizing excellence in card innovation.
Besides opening 1 branch in UAE and 1 branch in Qatar, MashreqBank increased its number of ATMs in the UAE to 157 ATMs covering the whole country. Mashreqbank plans to open 10 more branches in the UAE in the next one year.