DUBAI: Mashreq, Dubai's third-biggest lender by assets, on Monday posted a 26.1 percent rise in third-quarter net profit, driven by a jump in income from its core business.
Mashreq is the latest United Arab Emirates bank to report a healthy set of third quarter earnings, as lenders benefit from an economy forecast by the IMF to grow at 4.3 percent this year.
Earlier on Monday, Union National Bank posted a 21.9 percent increase in net profit.
First Gulf Bank, the UAE's third-largest bank by assets, reports later in the day.
The lender made a net profit of 596.8 million dirhams ($162.5 million) for the three months to September 30, it said in a statement, a increase on the 473.2 million dirhams recorded for the corresponding period of last year.
Mashreq's performance was bolstered by a rise in net interest income, with profits from the segment swelling to 785.6 million dirhams, up by 25.6 percent from the year earlier period.
This was aided by strong loan growth, with total loans up 14 percent since the start of 2014 to 57.3 billion dirhams.
Net fee and commission income rose to 425.4 million dirhams, up 5.8 percent year on year, the statement said.
The bank is one of an increasing number of local lenders looking to snap up banking stakes in other countries to diversify in the face of intense competition at home, where 51 lenders battle for market share.
Mashreq is targeting Egypt and Turkey for acquisitions, Chief Executive Abdul Aziz al-Ghurair said on Sept. 17.
"While the banking industry in the UAE remains a crowded and competitive arena, there are huge opportunities too," the CEO said in Monday's statement.
Profit for the first nine months of 2014 reached 1.76 billion dirhams, compared to 1.3 billion dirhams in the same period of 2013.
The bank's allowances for impairments rose during the third-quarter to 304.2 million to the end of September, up from 242.3 million in the corresponding period of last year.
Most local banks have in recent years had to raise buffers against soured loans after a spate of debt restructurings linked to a property and financial downturn.
Although reviving asset quality has helped lenders earnings performance in the last two years as they set aside less cash and reclassify some bad loans as performing. (Reuters)
