Mashreq Bank’s Half-Year Profit Drops to $952.9 Million Due to New 15% UAE Tax
Mashreq Bank reported a profit of $952.9 million (AED 3.5 billion) for the first half of the year. This is 13% lower than the same time last year (AED 4 billion), mainly because of the new 15% corporate tax in the UAE under the global minimum tax rule (Pillar Two).
Performance and Income
Even though the bank performed well in its operations, the new tax reduced overall profits.
Mashreq made $1.69 billion (AED 6.2 billion) in operating income. This was helped by a 21% growth in loans and strong earnings from sources other than interest, despite falling interest rates.
Operating costs went up by 11.5% compared to last year. This was due to investments in new technology, hiring international talent, and expanding the bank’s services.
The bank spent more on technology like automation, GenAI (generative AI), and improving customer services. Still, it kept a strong cost-to-income ratio of 30%, showing efficient operations and potential for growth. Return on equity stayed at 20%.
Earnings Details
Mashreq earned $544.5 million (AED 2 billion) in interest income during the second quarter, thanks to more lending and a 69% CASA (current and savings account) ratio. Non-interest income also jumped 17%, helped by better investment results and other income.
The bank’s cross-sell ratio increased to 36%, showing a focus on customer needs and a wide range of services.
CEO Statement
Mashreq Group CEO Ahmed Abdelaal said the bank continues to perform well despite global challenges and lower interest rates. He highlighted strong customer activity, innovation, and efficiency as key strengths.
Strong Growth and Stability
Mashreq kept its asset quality strong. Its non-performing loan (NPL) ratio improved to 1.2%, and it had a high coverage ratio of 210%. The bank also set aside $66.7 million (AED 245 million) as a safety measure, even though loan growth was strong.
The bank’s total assets grew by 16% compared to last year, with loans up 21% and customer deposits up 15%. Growth was driven by lending in areas like housing, construction, and manufacturing.
Mashreq also had strong liquidity, with a 30.6% liquid assets ratio, a 75% loan-to-deposit ratio, and a 120% liquidity coverage ratio.
Published: 1st August 2025
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