Mashreq Bank's Q1 2025 Net Profit Declines Amid Rate Cuts
Mashreq Bank reported a 12% year-on-year decline in net profit for the first quarter of 2025, attributing the decrease to a contraction in net interest income following recent rate cuts by the UAE Central Bank.
The Dubai-listed lender's net profit after tax for the quarter stood at AED 1.8 billion , down from AED 2.041 billion in the same period last year. Net interest income fell by 8% year-on-year, primarily due to a 62 basis points contraction in the net interest margin , which decreased to 3.3%. This decline was driven by a 100 basis points rate cut implemented by the UAE Central Bank.
Despite the reduction in net interest income, Mashreq Bank maintained a strong balance sheet. Total assets increased by 11% year-on-year to AED 267 billion, supported by an 18% growth in loans and advances. Customer deposits rose to AED 161 billion, with current and savings accounts now representing 66% of total deposits.
Non-interest income saw a significant increase, surging by 63% to AED 5 billion. This growth was driven by enhanced fee-generating activities and strong client engagement in foreign exchange, derivatives, and commodities. The bank also recognised a one-off net gain of AED 1.2 billion from the strategic partial sale of a subsidiary, demonstrating its ability to identify and capitalise on value-accretive market opportunities.
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