Al-Mashreq records revenues of 5.1 billion dirhams during 2020
Mashreq Bank announced today its financial results for the year ending on December 31, 2020, revealing a 14.1% year-on-year decline in revenues to 5.1 billion dirhams.
The bank attributed the decline in revenues mainly to the low interest rate, the impact of the "Covid-19" pandemic, and the slowdown in economic activities as a result of lower oil prices.
According to the financial and operational results, the newly introduced digital channels supported an increase of 55% in the customer base, and the balances of current and saving accounts witnessed an increase of 23.5% on an annual basis, amounting to 8.9 billion dirhams.
The bank confirmed that 84% of individual customers were digitally served, while corporate payments were turned into 100% "digital" during the year, which confirms the effectiveness of the bank's digital transformation strategy.
The bank indicated a 5% reduction in operating costs, mainly driven by the efficiencies of digital services.
However, total expenditures increased by 12.3% year-on-year, due to the one-off costs associated with rationalizing branches in the UAE, and enabling remote work for global bank employees during the pandemic.
The data also showed a decline in income from operations before risk charges, by 34.6% to 2.2 billion dirhams on an annual basis, due to the decrease in revenues and one-off operating costs.
The bank confirmed an increase in provisions from 1.2 billion dirhams in 2019 to 3.4 billion dirhams in 2020, while the non-performing loan ratio was 5.1%, and the coverage rate was 130%.
The bank stated that it managed the liquidity position proactively throughout the year, and consistently followed a conservative approach in positioning liquidity, pointing out that the liquidity coverage ratio at the end of the year was 160%, and the loans to deposits ratio was 81%, indicating the bank's strong liquidity position.
Abdul Aziz Al Ghurair, Chairman of Mashreq Bank, said: “Unprecedented times have passed, and our focus has always been on working closely with our customers and colleagues, to provide uninterrupted services, ensuring consistency of standards and providing a safe working environment as much as possible.
I am very proud of the way our employees rose to the challenge and went to great lengths to serve all customers. ”
He continued, "We continued to invest in basic programs that would enhance the bank's ability to achieve long-term growth, in light of the changes taking place in the banking sector, and to keep pace with the technologies that drive us forward."
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