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Zawya
a day ago
- Business
- Zawya
Mashreq Records AED6.2bln in operating income in H1 2025, underpinned by robust loan growth, best-in-class risk/return profile, market-leading capitalization, and strategic expansion
RELATED TOPICS EARNINGS RELATED COMPANIES SME Bk CBUAE TFB Bank F iShares MSCI Mashreq bank Dubai, Mashreq Bank PSC (MASQ) reported its financial results for H1 2025. Key Metrics: Note: Figures may not add up due to rounding differences Mashreq's operating income reached AED 6.2 billion in H1 2025, reaffirming the Bank's position as one of the region's most resilient and forward-looking financial institutions. The performance reflects Mashreq's continued ability to generate strong, broad-based growth despite a softening interest rate environment, supported by double-digit increases in both lending and non-interest income. Return on Equity remained robust at 20%, while the industry-leading Cost-to-Income ratio of 30% highlights ongoing efficiency even amid accelerated investment in digital transformation, AI-enabled capabilities, and strategic international market expansion. These results underscore Mashreq's disciplined execution, diversified revenue model, and long-term focus on sustainable value creation for clients and shareholders alike. Revenues Robust topline performance underpinned by diversified growth, pricing discipline and a superior funding mix. Operating income rose to AED 6.2 billion in H1 2025, driven by 21% year-on-year growth in loans and robust contributions from investment and other non-interest income streams—highlighting Mashreq's ability to capture value across cycles and deliver quality growth amid moderating interest rates. Net interest income increased 1% quarter-on-quarter to AED 2.0 billion in Q2 2025, as sustained volume growth and disciplined asset repricing offset the cumulative 100bps rate cut implemented since 2024. Net Interest Margin (NIM) remained strong at 3.2%, supported by continued enhancement of Mashreq's funding profile, with the CASA ratio improving to a market-leading 69%, up from 62% year-on-year. Non-interest income expanded 17% year-on-year, propelled by a 55% surge in investment income and a 56% increase in other income streams. The Cross-Sell Ratio rose to 36%, a 5% year-on-year improvement, reinforcing the strength of Mashreq's relationship-led strategy and deepening client penetration across businesses. Expenses Strategic investment in digital transformation, global talent, and international client platforms—delivered with best-in-class cost efficiency. Operating expenses increased by 11.5% year-on-year, reflecting focused investments to support Mashreq's international expansion, upgrade digital infrastructure, and enhance client interface channels across all key markets. This includes continued advancement of next-generation platforms, automation, and GenAI-led initiatives, as well as targeted recruitment and upskilling of high-impact talent. Despite elevated investment activity, the cost-to-income ratio remained best-in-class at 30%, underscoring Mashreq's operational discipline, scalable technology backbone, and sustained ability to drive efficiency while executing its strategic growth roadmap. Net Profit Resilient bottom-line delivery driven by core strength, global expansion, and capital efficiency—despite higher tax headwinds. Profit Before Tax reached AED 4.1 billion in H1 2025, underscoring the continued strength of Mashreq's core banking franchise and the momentum across key business lines. This performance was achieved despite a softer rate environment, normalization of risk costs, and sustained strategic investments in digital innovation and international expansion across Türkiye, Oman, and Pakistan. Net Profit After Tax stood at AED 3.5 billion, reflecting Mashreq's ability to deliver solid earnings and maintain profitability in the face of a significantly higher tax burden following the implementation of the UAE's 15% global minimum tax under the Pillar Two framework. Return on Equity (ROE) remained strong at 20%, illustrating the Bank's ongoing ability to generate superior shareholder returns through disciplined capital allocation, a capital-light operating model, and diversified revenue streams. Mashreq's earnings profile remains balanced and resilient, demonstrating its capacity to sustain profitability while continuing to invest in long-term growth across digital platforms, strategic markets, and client-centric verticals. Asset Quality Exceptional credit discipline and proactive risk management sustain sector-leading asset quality Provision charges increased to AED 245 million in H1 2025, reflecting Mashreq's prudent and forward-looking risk posture in light of continued global macroeconomic and geopolitical uncertainties, despite robust double-digit loan growth. The Non-Performing Loan (NPL) ratio further improved to 1.2%, down from 1.3% year-on-year, reaffirming Mashreq's market-leading asset quality and underscoring the effectiveness of its disciplined underwriting and early-warning risk frameworks. The Coverage Ratio remained exceptionally strong at 210%, highlighting the Bank's conservative provisioning strategy and its strong capacity to absorb potential credit stress, even under evolving operating conditions. Balance Sheet Sustained double-digit growth anchored in strong client demand (loans up 21%), funding depth (CASA 69%), and strategic lending across key sectors. Mashreq's balance sheet expanded by 16% year-on-year in H1 2025, reflecting healthy underlying demand across priority markets and continued momentum in both wholesale and retail banking segments. Loans and advances—including to customers and banks—grew by a solid 21% year-on-year, with growth concentrated in strategically important sectors such as residential mortgages, manufacturing, construction, and financial institutions, reinforcing the Bank's role in supporting real economy sectors. Customer deposits reached AED 178 billion, up 15% year-on-year, driven by deepening client relationships and continued franchise strength. Notably, the CASA ratio rose to 69% of total deposits, providing a stable and low-cost funding base that enhances both profitability and liquidity resilience. Liquidity and Capital Industry-leading capitalization and strong liquidity buffers reinforced by strong earnings underpin resilience and investor confidence in Mashreq's credit strengthen. Mashreq maintained a robust liquidity position, with a Liquid Assets Ratio of 30.6%, a Loan-to-Deposit Ratio of 75%, and a Liquidity Coverage Ratio (LCR) of 120%—well above regulatory requirements—reinforcing the Bank's conservative liquidity posture and capacity to navigate dynamic market conditions. The Bank's capitalization profile remains among the strongest in the industry, supported by sustained profitability and prudent capital management. As of H1 2025, the Capital Adequacy Ratio (CAR) stood at 17.5%, with a Tier 1 Capital Ratio of 16.2% and a Common Equity Tier 1 (CET1) Ratio of 14.8%—providing a significant buffer above minimum regulatory thresholds and positioning the Bank to support growth while managing risk effectively. Mashreq further strengthened its funding base through a successful USD 500 million Sukuk issuance, deepening its access to international capital markets and reaffirming its leadership in Islamic finance. The issuance—priced at UST +105bps with a fixed profit rate of 5.03% per annum—was 6x oversubscribed despite market volatility, drawing interest from 90 global investors and reflecting deep confidence in Mashreq's credit fundamentals and strategic direction. D-SIB Designation Recognition of systemic importance reinforces Mashreq's role as a cornerstone of the UAE financial system In H1 2025, the Central Bank of the UAE formally designated Mashreq as a Domestic Systemically Important Bank (D-SIB)—a testament to the Bank's scale, financial strength, and critical role in the stability and advancement of the national banking ecosystem. This designation brings enhanced regulatory expectations, including elevated standards for stress testing, capital, liquidity, and risk governance. Mashreq is already well-positioned to meet and exceed these requirements, with a Capital Adequacy Ratio that surpasses fully-loaded D-SIB thresholds by a comfortable 25% margin as of June 30, 2025. The D-SIB status underscores the trust placed in Mashreq by regulators, clients, and stakeholders, and reinforces the Bank's long-term strategic importance to the UAE's economic transformation and financial resilience. H.E. Abdul Aziz Al Ghurair Chairman, Mashreq The first half of 2025 marked another period of exceptional performance and strategic momentum for Mashreq. Our results are a reflection of the trust our clients place in us, the strength and clarity of our long-term strategy, and our unwavering commitment to driving sustainable economic transformation across the UAE and the broader region. While global macroeconomic uncertainty continues to pose challenges, the GCC stands out as a beacon of resilience, supported by strong policy frameworks, fiscal prudence, and a rapidly diversifying non-oil economy. This strength is clearly mirrored in the performance of the UAE banking sector, which saw total investments exceed AED 760 billion by March of this year. Mashreq's trajectory is firmly aligned with this regional momentum. Our continued ability to deliver double-digit growth, expand internationally, and lead with innovation underscores our differentiated value proposition and our disciplined execution across cycles. We remain resolute in our ambition to create enduring value by empowering clients, championing responsible finance, and building a digitally advanced, globally connected financial institution. As the UAE economy maintains its upward trajectory, Mashreq will continue to be a key enabler—supporting inclusive growth, advancing national priorities, and reinforcing the country's position as a global financial hub. Ahmed Abdelaal Group Chief Executive Officer, Mashreq Mashreq's performance in the first half of 2025 reinforces the strength of our business model and our disciplined approach to sustainable, high-quality growth. Despite a more moderated rate environment and evolving global dynamics, we continued to deliver robust results—underpinned by strong client activity, a diversified earnings profile, and our unwavering commitment to innovation, efficiency, and value creation. Our investment strategy remains sharply focused on future-proofing the organization. We are making measured yet impactful investments in upgrading our technology infrastructure, expanding our digital and international presence, and forming strategic partnerships that allow us to deliver best-in-class client experiences across all segments. These efforts are designed not just to enhance competitiveness but to embed long-term resilience and scalability into our operations. At the same time, we have maintained strict cost discipline. Our ability to absorb continued investment—without compromising our industry-leading cost-to-income ratio of 30%—speaks to the strength of our operational model and our relentless focus on efficiency. Our strategic expansion into high-growth markets such as Pakistan, Türkiye and Oman, along with our entry into GIFT City in India, marks a pivotal step in building Mashreq's global relevance and connectivity. These initiatives are aligned with our ambition to support cross-border capital flows and to serve our clients across key economic corridors with tailored, high-impact financial solutions. As we look ahead, our priorities remain clear: to scale responsibly, partner strategically, and invest intelligently—delivering long-term value to our shareholders while continuing to lead with innovation, discipline, and purpose. Note: Figures may not add up due to rounding differences Net Interest Income rose 1% quarter-on-quarter but declined 6% year-on-year due to a 61bps contraction in NIM to 3.2%, which was driven by a 100bps rate cut by UAE Central Bank. Non-Interest Income representing 36% of Total Operating Income witnessed a 17% year-on-year growth in H1 2025 to AED 2.2 billion supported by strong growth in investment (+55% year-on-year) and other income (+56% year-on-year). Total Operating Income increased by 1% to AED 6.2 billion in H1 2025 supported by non-interest income and double-digit growth in the loan and advances. Operating expenses grew by 11.5%, reflecting continued investment in digital innovation and strategic business expansion. Impairment allowances remained low at AED 245 million in H1 2025 (cost of credit of 36bps), reflecting the strong quality of the loan book and underwriting standards. Income tax expense of AED 604 million in H1 2025 up by 35% year-on-year impacted the net profit after tax, which saw a decline of 14% to reach AED 3.5 billion in H1 2025, with a strong ROE of 20%. Balance Sheet Highlights (AED mn) Jun Jun Δ % Jun Mar Dec Δ % 2025 2024 YoY 2025 2025 2024 QoQ YTD Loan to Customers 134,120 113,827 18% 134,120 125,817 124,758 7% 8% Loans to Banks 63,047 49,142 28% 63,047 55,266 52,272 14% 21% Investments 36,704 39,198 -6% 36,704 37,578 36,422 -2% 1% Cash & Due from Central Bank 46,096 37,572 23% 46,096 41,423 40,593 11% 14% Other Assets 13,518 13,464 0% 13,518 12,467 13,258 8% 2% Investments in Properties 150 264 -43% 150 152 152 -1% -1% Total Assets 293,635 253,467 16% 293,635 272,703 267,453 8% 10% Customer Deposits 177,645 153,964 15% 177,645 171,442 160,940 4% 10% Balances due to banks 48,534 41,421 17% 48,534 42,905 43,374 13% 12% Loans and Sukuk 5,202 4,604 13% 5,202 3,613 3,903 44% 33% Other Liabilities 21,600 19,114 13% 21,600 19,397 19,381 11% 11% Repo 3,659 1,109 230% 3,659 - 2,076 - 76% Minority Interest 1,120 1,003 12% 1,120 1,078 1,067 4% 5% Total Equity 35,876 32,252 11% 35,876 34,269 36,713 5% -2% Total Equity & Liabilities 293,635 253,467 16% 293,635 272,703 267,453 8% 10% . YoY% Key Metrics (%) Jun Jun Δ bps Jun Mar Dec Δ bps 2025 2024 YoY 2025 2025 2024 QoQ YTD CAR (Capital Adequacy Ratio - Basel III) 17.5% 19.5% (190) 17.5% 18.5% 17.5% (90) 5 CET1 (Common Equity Tier 1) ratio 14.8% 15.7% (90) 14.8% 15.4% 14.5% (64) 30 Tier 1 Ratio 16.2% 17.3% (115) 16.2% 16.9% 16.0% (78) 16 Note: Figures may not add up due to rounding differences Total Assets grew to AED 294 billion in H1 2025, marking a 16% year-on-year and 10% year-to-date increase, due to continued credit growth and liquidity optimization The growth in the balance sheet is supported by year-on-year growth in total assets of wholesale banking segment by 23% to AED 161 billion and retail banking segment by 12% to AED 35 billion Customer Deposits increased 15% year-on-year to AED 177 billion with CASA accounting for 69% of total deposits NPL Ratio stood at 1.2% and remained the lowest in the industry Strong capitalization in H1 2025 with Capital Adequacy Ratio of 17.5%, CET1 ratio of 14.8% and Tier 1 ratio of 16.2%, however slightly impacted by strong credit growth resulting in increased Risk Weighted Assets Looking Ahead Mashreq's first-half performance in 2025 reaffirmed the strength of its diversified business model, the trust it commands across domestic and international markets, and its disciplined approach to strategic execution. Looking ahead to the remainder of the year, the Bank will remain focused on driving innovation-led growth, enhancing customer experience across all segments, and expanding its presence in priority markets. Recent entries into Turkey and Oman mark the beginning of a broader regional expansion strategy, with Mashreq aiming to deepen its international footprint through a targeted, client-centric approach. Supported by a strong capital and liquidity base, Mashreq is well-positioned to deliver sustainable and balanced growth, while preserving its leading asset quality and continuing to generate superior returns for shareholders. Awards: Ranked #23 on the Forbes Middle East Top 100 Listed Companies 2025 The Banker – Top 1000 World Banks Best Performing Bank in the UAE for the 3rd consecutive year #1 in the Middle East for Return on Capital (3rd consecutive year) #1 in the Middle East for Return on Assets (2nd consecutive year) S&P Global Market Intelligence Best-performing publicly traded bank in the Middle East in 2025 MEED MENA Banking Excellence Awards Excellence in Sustainable Investment – Corporate & Investment Banking Group Best Compliance and Regulatory Initiative – Eagle Eye Platform Asian Banking & Finance Awards New Consumer Lending Product of the Year - UAE Customer Experience Initiative of the Year - UAE Digital Transformation of the Year - UAE Open Banking Initiative of the Year - UAE Insurance Product Innovation of the Year - UAE Private Bank of the Year – UAE Wealth Management Platform of the Year – UAE SME Bank of the Year – UAE SME Digital Innovation of the Year – UAE Global Finance Top Financial Innovation for 2025 - Pulse Mobile App Euromoney Awards for Excellence The Middle East's Best Bank for Large Corporates The Middle East's Best Digital Bank for Large Corporates The Middle East's Best Bank for Homeowners Bahrain's Best International Bank Bahrain's Best Bank for Large Corporates The UAE's Best Bank for Large Corporates The UAE's Best Bank for Homeowners Euromoney Private Banking Award for 2025 United Arab Emirates' Best for Family Office Services for the 2nd consecutive year. Euromoney Trade Finance Survey: Best Trade Finance Bank in the Middle East Best Trade Finance Bank in Qatar Best Trade Finance Bank for Products, Client Service, and Islamic trade finance products in the Middle East Best Trade Finance Bank for Products in Bahrain Best Trade Finance Bank for Products, Technology and Client Service in Qatar
Zawya
a day ago
- Business
- Zawya
Mashreq records AED 6.2bln in operating income in H1 2025
RELATED TOPICS EARNINGS RELATED COMPANIES SME Bk CBUAE Mashreq bank TFB Bank F iShares MSCI Dubai – Mashreq Bank PSC (MASQ) reported its financial results for H1 2025. Key Metrics: Mashreq's operating income reached AED 6.2 billion in H1 2025, reaffirming the Bank's position as one of the region's most resilient and forward-looking financial institutions. The performance reflects Mashreq's continued ability to generate strong, broad-based growth despite a softening interest rate environment, supported by double-digit increases in both lending and non-interest income. Return on Equity remained robust at 20%, while the industry-leading Cost-to-Income ratio of 30% highlights ongoing efficiency even amid accelerated investment in digital transformation, AI-enabled capabilities, and strategic international market expansion. These results underscore Mashreq's disciplined execution, diversified revenue model, and long-term focus on sustainable value creation for clients and shareholders alike. Revenues Robust topline performance underpinned by diversified growth, pricing discipline and a superior funding mix. Operating income rose to AED 6.2 billion in H1 2025, driven by 21% year-on-year growth in loans and robust contributions from investment and other non-interest income streams—highlighting Mashreq's ability to capture value across cycles and deliver quality growth amid moderating interest rates. Net interest income increased 1% quarter-on-quarter to AED 2.0 billion in Q2 2025, as sustained volume growth and disciplined asset repricing offset the cumulative 100bps rate cut implemented since 2024. Net Interest Margin (NIM) remained strong at 3.2%, supported by continued enhancement of Mashreq's funding profile, with the CASA ratio improving to a market-leading 69%, up from 62% year-on-year. Non-interest income expanded 17% year-on-year, propelled by a 55% surge in investment income and a 56% increase in other income streams. The Cross-Sell Ratio rose to 36%, a 5% year-on-year improvement, reinforcing the strength of Mashreq's relationship-led strategy and deepening client penetration across businesses. Expenses Strategic investment in digital transformation, global talent, and international client platforms—delivered with best-in-class cost efficiency. Operating expenses increased by 11.5% year-on-year, reflecting focused investments to support Mashreq's international expansion, upgrade digital infrastructure, and enhance client interface channels across all key markets. This includes continued advancement of next-generation platforms, automation, and GenAI-led initiatives, as well as targeted recruitment and upskilling of high-impact talent. Despite elevated investment activity, the cost-to-income ratio remained best-in-class at 30%, underscoring Mashreq's operational discipline, scalable technology backbone, and sustained ability to drive efficiency while executing its strategic growth roadmap. Net Profit Resilient bottom-line delivery driven by core strength, global expansion, and capital efficiency—despite higher tax headwinds. Profit Before Tax reached AED 4.1 billion in H1 2025, underscoring the continued strength of Mashreq's core banking franchise and the momentum across key business lines. This performance was achieved despite a softer rate environment, normalization of risk costs, and sustained strategic investments in digital innovation and international expansion across Türkiye, Oman, and Pakistan. Net Profit After Tax stood at AED 3.5 billion, reflecting Mashreq's ability to deliver solid earnings and maintain profitability in the face of a significantly higher tax burden following the implementation of the UAE's 15% global minimum tax under the Pillar Two framework. Return on Equity (ROE) remained strong at 20%, illustrating the Bank's ongoing ability to generate superior shareholder returns through disciplined capital allocation, a capital-light operating model, and diversified revenue streams. Mashreq's earnings profile remains balanced and resilient, demonstrating its capacity to sustain profitability while continuing to invest in long-term growth across digital platforms, strategic markets, and client-centric verticals. Asset Quality Exceptional credit discipline and proactive risk management sustain sector-leading asset quality Provision charges increased to AED 245 million in H1 2025, reflecting Mashreq's prudent and forward-looking risk posture in light of continued global macroeconomic and geopolitical uncertainties, despite robust double-digit loan growth. The Non-Performing Loan (NPL) ratio further improved to 1.2%, down from 1.3% year-on-year, reaffirming Mashreq's market-leading asset quality and underscoring the effectiveness of its disciplined underwriting and early-warning risk frameworks. The Coverage Ratio remained exceptionally strong at 210%, highlighting the Bank's conservative provisioning strategy and its strong capacity to absorb potential credit stress, even under evolving operating conditions. Balance Sheet Sustained double-digit growth anchored in strong client demand (loans up 21%), funding depth (CASA 69%), and strategic lending across key sectors. Mashreq's balance sheet expanded by 16% year-on-year in H1 2025, reflecting healthy underlying demand across priority markets and continued momentum in both wholesale and retail banking segments. Loans and advances—including to customers and banks—grew by a solid 21% year-on-year, with growth concentrated in strategically important sectors such as residential mortgages, manufacturing, construction, and financial institutions, reinforcing the Bank's role in supporting real economy sectors. Customer deposits reached AED 178 billion, up 15% year-on-year, driven by deepening client relationships and continued franchise strength. Notably, the CASA ratio rose to 69% of total deposits, providing a stable and low-cost funding base that enhances both profitability and liquidity resilience. Liquidity and Capital Industry-leading capitalization and strong liquidity buffers reinforced by strong earnings underpin resilience and investor confidence in Mashreq's credit strengthen. Mashreq maintained a robust liquidity position, with a Liquid Assets Ratio of 30.6%, a Loan-to-Deposit Ratio of 75%, and a Liquidity Coverage Ratio (LCR) of 120%—well above regulatory requirements—reinforcing the Bank's conservative liquidity posture and capacity to navigate dynamic market conditions. The Bank's capitalization profile remains among the strongest in the industry, supported by sustained profitability and prudent capital management. As of H1 2025, the Capital Adequacy Ratio (CAR) stood at 17.5%, with a Tier 1 Capital Ratio of 16.2% and a Common Equity Tier 1 (CET1) Ratio of 14.8%—providing a significant buffer above minimum regulatory thresholds and positioning the Bank to support growth while managing risk effectively. Mashreq further strengthened its funding base through a successful USD 500 million Sukuk issuance, deepening its access to international capital markets and reaffirming its leadership in Islamic finance. The issuance—priced at UST +105bps with a fixed profit rate of 5.03% per annum—was 6x oversubscribed despite market volatility, drawing interest from 90 global investors and reflecting deep confidence in Mashreq's credit fundamentals and strategic direction. D-SIB Designation Recognition of systemic importance reinforces Mashreq's role as a cornerstone of the UAE financial system In H1 2025, the Central Bank of the UAE formally designated Mashreq as a Domestic Systemically Important Bank (D-SIB)—a testament to the Bank's scale, financial strength, and critical role in the stability and advancement of the national banking ecosystem. This designation brings enhanced regulatory expectations, including elevated standards for stress testing, capital, liquidity, and risk governance. Mashreq is already well-positioned to meet and exceed these requirements, with a Capital Adequacy Ratio that surpasses fully-loaded D-SIB thresholds by a comfortable 25% margin as of June 30, 2025. The D-SIB status underscores the trust placed in Mashreq by regulators, clients, and stakeholders, and reinforces the Bank's long-term strategic importance to the UAE's economic transformation and financial resilience. H.E. Abdul Aziz Al Ghurair, Chairman, Mashreq: The first half of 2025 marked another period of exceptional performance and strategic momentum for Mashreq. Our results are a reflection of the trust our clients place in us, the strength and clarity of our long-term strategy, and our unwavering commitment to driving sustainable economic transformation across the UAE and the broader region. While global macroeconomic uncertainty continues to pose challenges, the GCC stands out as a beacon of resilience, supported by strong policy frameworks, fiscal prudence, and a rapidly diversifying non-oil economy. This strength is clearly mirrored in the performance of the UAE banking sector, which saw total investments exceed AED 760 billion by March of this year. Mashreq's trajectory is firmly aligned with this regional momentum. Our continued ability to deliver double-digit growth, expand internationally, and lead with innovation underscores our differentiated value proposition and our disciplined execution across cycles. We remain resolute in our ambition to create enduring value by empowering clients, championing responsible finance, and building a digitally advanced, globally connected financial institution. As the UAE economy maintains its upward trajectory, Mashreq will continue to be a key enabler—supporting inclusive growth, advancing national priorities, and reinforcing the country's position as a global financial hub. Ahmed Abdelaal, Group Chief Executive Officer, Mashreq Mashreq's performance in the first half of 2025 reinforces the strength of our business model and our disciplined approach to sustainable, high-quality growth. Despite a more moderated rate environment and evolving global dynamics, we continued to deliver robust results—underpinned by strong client activity, a diversified earnings profile, and our unwavering commitment to innovation, efficiency, and value creation. Our investment strategy remains sharply focused on future-proofing the organization. We are making measured yet impactful investments in upgrading our technology infrastructure, expanding our digital and international presence, and forming strategic partnerships that allow us to deliver best-in-class client experiences across all segments. These efforts are designed not just to enhance competitiveness but to embed long-term resilience and scalability into our operations. At the same time, we have maintained strict cost discipline. Our ability to absorb continued investment—without compromising our industry-leading cost-to-income ratio of 30%—speaks to the strength of our operational model and our relentless focus on efficiency. Our strategic expansion into high-growth markets such as Pakistan, Türkiye and Oman, along with our entry into GIFT City in India, marks a pivotal step in building Mashreq's global relevance and connectivity. These initiatives are aligned with our ambition to support cross-border capital flows and to serve our clients across key economic corridors with tailored, high-impact financial solutions. As we look ahead, our priorities remain clear: to scale responsibly, partner strategically, and invest intelligently—delivering long-term value to our shareholders while continuing to lead with innovation, discipline, and purpose. Income Statement Highlights (AED mn) Quarterly Trend 1H Δ % 2Q 1Q 2Q Δ % Net Interest Income & Income from Islamic Financing 3,961 4,226 -6% 1,995 1,967 2,082 1% -4% Fees & Commission 644 884 -27% 296 348 336 -15% -12% Investment Income 213 137 55% 100 112 70 -11% 44% Insurance, FX & Other Income 1,370 881 56% 676 694 499 -3% 36% Non-Interest Income 2,226 1,902 17% 1,072 1,154 904 -7% 19% Total Operating Income 6,187 6,127 1% 3,067 3,120 2,986 -2% 3% Operating Expenses -1,866 -1,673 12% -948 -918 -834 3% 14% Operating Profit 4,321 4,454 -3% 2,119 2,202 2,152 -4% -2% Impairment Allowance -245 45 -645% -144 -101 83 42% -274% Net Profit Before Tax 4,076 4,499 -9% 1,975 2,101 2,234 -6% -12% Tax -604 -447 35% -295 -309 -223 -5% 32% Net Profit after Tax 3,472 4,052 -14% 1,680 1,792 2,011 -6% -16% Non-Controlling Interest -68 -50 37% -32 -36 -16 -11% 101% Profit attributable to Owners of the Parent 3,404 4,003 -15% 1,648 1,756 1,995 -6% -17% EPS (AED) 16.4 19.7 -17% 7.9 8.5 9.9 -7% -21% Key Metrics (%) 1H Δ bps 2Q 1Q 2Q Δ bps 2025 2024 YoY 2025 2025 2024 QoQ YoY Cost to Income Ratio 30% 27% 286 31% 29% 28% 149 297 Return on Assets 2.4% 3.3% -86 2.3% 2.5% 3.2% -23 -93 Return on Equity 20% 28% -743 19% 21% 27% -140 -796 Note: Figures may not add up due to rounding differences Net Interest Income rose 1% quarter-on-quarter but declined 6% year-on-year due to a 61bps contraction in NIM to 3.2%, which was driven by a 100bps rate cut by UAE Central Bank. Non-Interest Income representing 36% of Total Operating Income witnessed a 17% year-on-year growth in H1 2025 to AED 2.2 billion supported by strong growth in investment (+55% year-on-year) and other income (+56% year-on-year). Total Operating Income increased by 1% to AED 6.2 billion in H1 2025 supported by non-interest income and double-digit growth in the loan and advances. Operating expenses grew by 11.5%, reflecting continued investment in digital innovation and strategic business expansion. Impairment allowances remained low at AED 245 million in H1 2025 (cost of credit of 36bps), reflecting the strong quality of the loan book and underwriting standards. Income tax expense of AED 604 million in H1 2025 up by 35% year-on-year impacted the net profit after tax, which saw a decline of 14% to reach AED 3.5 billion in H1 2025, with a strong ROE of 20%. Balance Sheet Highlights (AED mn) Jun Jun Δ % Jun Mar Dec Δ % 2025 2024 YoY 2025 2025 2024 QoQ YTD Loan to Customers 134,120 113,827 18% 134,120 125,817 124,758 7% 8% Loans to Banks 63,047 49,142 28% 63,047 55,266 52,272 14% 21% Investments 36,704 39,198 -6% 36,704 37,578 36,422 -2% 1% Cash & Due from Central Bank 46,096 37,572 23% 46,096 41,423 40,593 11% 14% Other Assets 13,518 13,464 0% 13,518 12,467 13,258 8% 2% Investments in Properties 150 264 -43% 150 152 152 -1% -1% Total Assets 293,635 253,467 16% 293,635 272,703 267,453 8% 10% Customer Deposits 177,645 153,964 15% 177,645 171,442 160,940 4% 10% Balances due to banks 48,534 41,421 17% 48,534 42,905 43,374 13% 12% Loans and Sukuk 5,202 4,604 13% 5,202 3,613 3,903 44% 33% Other Liabilities 21,600 19,114 13% 21,600 19,397 19,381 11% 11% Repo 3,659 1,109 230% 3,659 - 2,076 - 76% Minority Interest 1,120 1,003 12% 1,120 1,078 1,067 4% 5% Total Equity 35,876 32,252 11% 35,876 34,269 36,713 5% -2% Total Equity & Liabilities 293,635 253,467 16% 293,635 272,703 267,453 8% 10% . YoY% Key Metrics (%) Jun Jun Δ bps Jun Mar Dec Δ bps 2025 2024 YoY 2025 2025 2024 QoQ YTD CAR (Capital Adequacy Ratio - Basel III) 17.5% 19.5% (190) 17.5% 18.5% 17.5% (90) 5 CET1 (Common Equity Tier 1) ratio 14.8% 15.7% (90) 14.8% 15.4% 14.5% (64) 30 Tier 1 Ratio 16.2% 17.3% (115) 16.2% 16.9% 16.0% (78) 16 Note: Figures may not add up due to rounding differences Total Assets grew to AED 294 billion in H1 2025, marking a 16% year-on-year and 10% year-to-date increase, due to continued credit growth and liquidity optimization The growth in the balance sheet is supported by year-on-year growth in total assets of wholesale banking segment by 23% to AED 161 billion and retail banking segment by 12% to AED 35 billion Customer Deposits increased 15% year-on-year to AED 177 billion with CASA accounting for 69% of total deposits NPL Ratio stood at 1.2% and remained the lowest in the industry Strong capitalization in H1 2025 with Capital Adequacy Ratio of 17.5%, CET1 ratio of 14.8% and Tier 1 ratio of 16.2%, however slightly impacted by strong credit growth resulting in increased Risk Weighted Assets Looking Ahead Mashreq's first-half performance in 2025 reaffirmed the strength of its diversified business model, the trust it commands across domestic and international markets, and its disciplined approach to strategic execution. Looking ahead to the remainder of the year, the Bank will remain focused on driving innovation-led growth, enhancing customer experience across all segments, and expanding its presence in priority markets. Recent entries into Turkey and Oman mark the beginning of a broader regional expansion strategy, with Mashreq aiming to deepen its international footprint through a targeted, client-centric approach. Supported by a strong capital and liquidity base, Mashreq is well-positioned to deliver sustainable and balanced growth, while preserving its leading asset quality and continuing to generate superior returns for shareholders. Awards: Ranked #23 on the Forbes Middle East Top 100 Listed Companies 2025 The Banker – Top 1000 World Banks Best Performing Bank in the UAE for the 3rd consecutive year #1 in the Middle East for Return on Capital (3rd consecutive year) #1 in the Middle East for Return on Assets (2nd consecutive year) S&P Global Market Intelligence Best-performing publicly traded bank in the Middle East in 2025 MEED MENA Banking Excellence Awards Excellence in Sustainable Investment – Corporate & Investment Banking Group Best Compliance and Regulatory Initiative – Eagle Eye Platform Asian Banking & Finance Awards New Consumer Lending Product of the Year - UAE Customer Experience Initiative of the Year - UAE Digital Transformation of the Year - UAE Open Banking Initiative of the Year - UAE Insurance Product Innovation of the Year - UAE Private Bank of the Year – UAE Wealth Management Platform of the Year – UAE SME Bank of the Year – UAE SME Digital Innovation of the Year – UAE Global Finance Top Financial Innovation for 2025 - Pulse Mobile App Euromoney Awards for Excellence The Middle East's Best Bank for Large Corporates The Middle East's Best Digital Bank for Large Corporates The Middle East's Best Bank for Homeowners Bahrain's Best International Bank Bahrain's Best Bank for Large Corporates The UAE's Best Bank for Large Corporates The UAE's Best Bank for Homeowners Euromoney Private Banking Award for 2025 United Arab Emirates' Best for Family Office Services for the 2nd consecutive year. Euromoney Trade Finance Survey: Best Trade Finance Bank in the Middle East Best Trade Finance Bank in Qatar Best Trade Finance Bank for Products, Client Service, and Islamic trade finance products in the Middle East Best Trade Finance Bank for Products in Bahrain Best Trade Finance Bank for Products, Technology and Client Service in Qatar Disclaimer: This document has been prepared by Mashreq Bank PSC ('Mashreq') solely for informational purposes. The views, statements, and data presented herein do not represent a public offer or invitation to subscribe to, purchase, or sell any financial instruments or securities. Furthermore, this document should not be construed as investment advice or a recommendation regarding any financial product. It is not intended for distribution in any jurisdiction where such dissemination would violate applicable laws or regulations. The content in this communication is intended to provide general insights into Mashreq's operations, performance, and strategic direction. While care has been taken in preparing the material, it may include data derived from third-party sources, which have not been independently validated. No warranty or representation is made as to the accuracy or completeness of the information, and it should not be relied upon as the sole basis for making investment decisions. Readers are encouraged to seek their own independent financial, legal, or tax advice tailored to their specific circumstances. This document may contain projections or forward-looking statements reflecting current views of Mashreq's management concerning future events, financial conditions, or performance. These statements are inherently subject to known and unknown risks and uncertainties, including economic developments, interest rate movements, regulatory shifts, geopolitical events, and other factors beyond the Bank's control. Consequently, actual results may differ significantly from those anticipated. Mashreq does not undertake any obligation to update or revise forward-looking statements to reflect future events or changes in expectations, except as required by applicable laws. Mashreq Bank PSC P.O. Box 1250, Dubai, United Arab Emirates
Cision Canada
22-07-2025
- Business
- Cision Canada
DXC Ranked a Leader in ISG Provider Lens™ Snowflake Ecosystem Partners 2025 Study
DXC is ranked a Leader in ISG's Provider Lens™ Snowflake Ecosystem Partners 2025 study across all categories in the US and Europe. The study evaluates providers' ability to advise clients on Snowflake ecosystem strategy, modernize data landscapes, enable advanced analytics, and manage the Snowflake environment. DXC's data-centric strategy, Gen AI-led transformations, streamlining and automating migrations, cost-optimized data ingestion, and workforce training and development were highlighted by ISG. ASHBURN, Va., July 22, 2025 /CNW/ - DXC Technology (NYSE: DXC), a leading Fortune 500 global technology services provider, today was recognized as a Leader by ISG, a leading global technology research and advisory firm, in its Provider Lens™ Snowflake Ecosystem Partners 2025 study across all categories in the US and Europe. The recognition highlights DXC's strengths in data-centric strategy, Gen AI-led transformations, streamlining and automating migrations, cost-optimized data ingestion, and workforce training and development. "DXC brings a robust, well-rounded, and end to-end Snowflake capability suite, combining deep advisory expertise, industry-specific implementations, GenAI integration, and strong managed services including MLOps integration," said Santhosh Alby, Lead ISG Analyst. "The company's work is reinforced by a culture of innovation and continuous learning to deliver scalable, secure, and future-ready data platforms." Snowflake is a leading cloud data platform that enables more than 11,000 companies worldwide to build, use, and share data, applications, and AI. DXC and Snowflake have collaborated to deliver advanced data-driven and AI solutions, including a connected mobility analytics solution for automotive. The 2025 Snowflake Ecosystem Partners study evaluates providers' ability to advise clients on Snowflake ecosystem strategy, modernize data landscapes, enable advanced analytics, and manage the Snowflake environment. The report highlights DXC's strengths across three categories: Consulting and Advisory Services – DXC's strength in legacy migrations, designing data strategies to minimize risk, and implementation and change management helps enterprises maximize ROI from Snowflake investments. Implementation Services – DXC's comprehensive Snowflake implementation services enable enterprises to accelerate migrations, optimize costs, and efficiently manage security and compliance across data. Managed and Support Services – DXC supports Snowflake ecosystems with security and governance compliance, automated resource scaling, metadata-driven data ingestion, and anomaly detection. "Snowflake plays a pivotal role in modern data management and analytics, allowing us to deliver faster, smarter solutions for our customers by combining data, AI, and governance in one platform," said Pete McEvoy, Managing Director and Global Data AI Head at DXC. "Our investment in the Snowflake ecosystem underscores our commitment to delivering AI-led and data-driven efficiencies that move our customers forward. This recognition from ISG reinforces the impact of our strategy and the value we're creating for our customers." The study also showcases DXC's emphasis on training and development, providing 24/7 access to over two million learning assets via the DXC Learning Platform. Additionally, DXC Academies offer robust upskilling and reskilling programs to help employees obtain certifications from providers like Snowflake. DXC's Data & AI offerings help customers benchmark, prioritize, select, and deploy the right infrastructure to leverage data as an asset and differentiator. DXC Consulting & Engineering Services' more than 50,000 engineers and specialized consultants build cloud environments tailored to each customer, resulting in accelerated migration, secured data, and maintenance optimization. The full 2025 ISG's Provider Lens™ Snowflake Ecosystem Partners 2025 study can be viewed here. For more information on DXC's Data & AI offerings, click here. About DXC Technology DXC Technology (NYSE: DXC) is a leading global provider of information technology services. We're a trusted operating partner to many of the world's most innovative organizations, building solutions that move industries and companies forward. Our engineering, consulting and technology experts help clients simplify, optimize and modernize their systems and processes, manage their most critical workloads, integrate AI-powered intelligence into their operations, and put security and trust at the forefront. Learn more on About ISG ISG (Information Services Group) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world's top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. For more information, please visit:
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Business Standard
15-07-2025
- Business
- Business Standard
Motilal Oswal sector of the week: IT services; check stock picks, targets
The Indian IT services sector is showing early signs of stability in Q1FY26, even as global macroeconomic uncertainty, geopolitical tensions, and tariff-related risks continue to weigh on sentiment. While the pace of large deal signings remained subdued, the quarter avoided widespread project deferrals or ramp-downs, pointing to operational resilience. Growth trends across the sector continue to diverge. While Tier-I companies are likely to post flat to marginal constant currency (cc) revenue movement, mid-tier firms are expected to outperform, supported by healthy deal ramp-ups, strong vertical traction, and recent acquisitions. Reported INR revenue will also benefit from 100–200 basis points of cross-currency gains, thanks to the weak US dollar. The pace of deal signings in Q2FY26 and beyond remains a key monitorable. Although discretionary IT budgets remain under pressure, client interest in next-generation, AI-led productivity programs is steadily gaining ground. As these initiatives transition from pilots to scaled execution, they could drive deal momentum in the coming quarters. Operating margins are expected to remain range-bound. Supply-side pressures have largely normalised, but factors such as visa costs, rupee appreciation, and modest revenue growth are likely to cap margin expansion. Nevertheless, some firms could benefit from better utilisation, pyramid optimisation, and the absence of earlier one-offs. The near-term setup is supported by seasonal strength in the first half, a stable demand environment in key verticals, and improving deal conversion for select players. While valuations are not materially discounted, they leave room for positive re-rating in case of earnings surprises. Key variables to track include visibility on large transformation programs, client commentary around tech budgets, deal pipeline progression, and execution in emerging tech areas like GenAI, automation, and cloud services. While a broad-based acceleration is yet to materialise, the sector appears to be transitioning toward a more stable footing. With early signs of demand revival and a favourable base in the second half, the groundwork is being laid for a more constructive FY26. Track Stock Market LIVE Updates HCL Tech – Target Price: ₹2,000 HCLT is well-positioned for FY26, supported by strong deal wins (USD 3 billion, +43 per cent QoQ) and revenue growth guidance of 2–5 per cent YoY CC, above peers. Margins held steady at 18 per cent, with management maintaining its FY26 target of 18–19 per cent. ER&D and Services continue to outperform, and early signs of recovery are visible in the manufacturing vertical. Deal momentum is underpinned by GenAI-led cost optimisation, and attrition has eased with ongoing fresher hiring. While discretionary spending remains muted, HCLT's diversified portfolio, strong pipeline, and muted supply-side pressures provide margin stability. We expect USD revenue and INR PAT to grow at a CAGR of 5.9 per cent and 8.2 per cent, respectively, over FY25–27E. Coforge – Target price: ₹2,400 We reiterate our 'Buy' on Coforge, supported by a robust executable order book of USD 1.5 billion (+47 per cent YoY) and strong traction in BFSI and transportation, both growing over 20 per cent YoY in FY25. The company is on track to achieve its USD 2 billion revenue target by FY27, aided by organic growth, Cigniti-led cross-sell, and the landmark USD 1.6 billion Sabre deal. Cross-currency gains and broad-based client momentum across BFSI and Insurance (48.5 per cent of revenue) further enhance visibility. Margins are set to expand, with one-offs behind and tailwinds from delivery mix and lower ESOP costs; management is targeting an 18 per cent Ebitda margin by FY27. Margin improvement is already visible, with Ebit margin rising to 14 per cent in Q1FY26.
Mint
14-07-2025
- Business
- Mint
Expert view: Nifty EPS may grow at a 13% CAGR over FY25–FY27, says Anil Rego of Right Horizons PMS
Expert view: Anil Rego, the founder and fund manager at Right Horizons PMS, believes the Nifty 50 EPS may grow at a CAGR of nearly 13 per cent over FY25–FY27, making the case for moderate, earnings-driven gains over the medium term. In an interview with Mint, Rego shared his expectations for Q1 earnings and said he is positive about banking, defence, and consumer discretionary sectors, among others, at this juncture. Edited excerpts: Following a sluggish start, Indian markets witnessed a notable recovery in June, spurred by a combination of supportive global developments and decisive domestic policy actions. The Reserve Bank of India's 50 bps rate cut and a 100 bps reduction in the CRR, alongside a 9 per cent monsoon surplus and easing oil prices, have improved liquidity and sentiment. This led to a sharp uptick in rate-sensitive sectors like financials, real estate, and autos, with broader markets outperforming large caps. Globally, while risk sentiment has improved post-ceasefire in the Middle East, geopolitical fragility, policy uncertainty in the US, and tariff tensions remain key overhangs. Despite these risks, corporate earnings remain resilient, and consensus expects Nifty EPS to grow at a CAGR of nearly 13 per cent over FY25–FY27. This supports the case for moderate, earnings-driven gains over the medium term. The US tariff risk is a growing concern for Indian markets, especially after India announced retaliatory tariffs on US steel and aluminium at the WTO. While the risk remains sector-specific for now, impacting exports like IT, pharma, and metals, it does not yet pose a threat of prolonged economic pain due to India's strong domestic fundamentals. However, if trade tensions escalate further, it could hurt earnings in export-oriented sectors and trigger FPI outflows. The Q1FY26 earnings season is expected to show early signs of recovery, but it may not mark a broad-based turnaround just yet. While some sectors are poised to outperform, others are likely to face lingering challenges, suggesting that the worst may be behind us selectively, not uniformly. Banking sector: Banks are expected to report muted earnings growth due to margin compression from the RBI's recent repo rate cuts, seasonally weak fee income, and elevated credit costs, particularly in unsecured and agri loan segments. However, the outlook improves from the second half of the financial year (H2FY26), with expectations of improved loan growth, easing deposit costs, and declining slippages. IT sector: The IT sector is likely to report mixed revenue growth. Tier-1 IT companies may post flat to marginally negative constant-currency (CC) growth, with only a few companies expected to grow sequentially. Mid-tier firms are expected to do relatively better, driven by strength in BFSI, healthcare, and GenAI-led demand. The sector's deal pipeline remains healthy, and margin guidance is stable, indicating resilience despite macro headwinds. The market outlook supports a selective sectoral approach, focusing on areas with strong earnings visibility, structural tailwinds, and valuation comfort. Financials (banks & NBFCs) Banks remain structurally positive, with asset quality stabilising and credit demand holding up. Margins may have peaked, but lower funding costs from RBI rate cuts should aid profitability from H2FY26. NBFCs, especially in retail lending, gold loans, and vehicle finance, are expected to benefit from improved liquidity and demand recovery. Funding diversification and strong disbursement momentum support their outlook. Public and private capex revival, strong order books, and government focus on infrastructure make this sector attractive. Execution momentum is visible across electrification, construction equipment, and engineering segments, backed by rising investments and policy incentives. A structural growth story driven by indigenous procurement (92 per cent of contracts awarded to Indian firms), record exports, and rising capex allocation. Private players are gaining traction alongside DPSUs, supported by a ₹ 40,000 crore emergency procurement push. Hospitals are showing robust growth in profitability, ARPOB, and occupancy rates. Expansion into tier-2 cities and the medical tourism potential offer multi-year tailwinds. Diagnostics and digital health initiatives continue to support earnings resilience. Urban consumption remains healthy, aided by premiumisation and easing input costs. Value fashion, QSRs, electronics, and jewellery segments are doing well. Tax relief and rural revival could further aid demand in H2FY26. EMS firms are benefitting from PLI schemes, China+1 diversification, and rising demand for domestic electronics. Strong capex, growing order books, and operating leverage suggest continued double-digit growth. The Indian wealth management sector is at a pivotal inflection point, driven by the rapid rise of HNIs and ultra-HNIs. Financial assets held by these segments are projected to grow from $1.2 trillion in 2023 to $2.2 trillion by 2028, reflecting strong wealth creation and rising financialization of assets. Yet, only 15 per cent of India's financial wealth is professionally managed, compared to nearly 75 per cent in developed markets. This vast gap presents a structural opportunity for PMS, AIFs, and advisory platforms to expand. There appears to be selective value emerging in the IT sector, particularly among mid-tier companies, although the broader outlook remains cautious. Early Q1FY26 earnings trends suggest that: Tier-1 IT firms are expected to post muted revenue growth in constant currency terms, with flat to low-single-digit QoQ changes. Deal flow remains intact, but revenue conversion is lagging due to delayed decision-making by clients in the US and Europe. Mid-cap IT players, however, are showing signs of resilience. They are benefitting from niche capabilities in areas like healthcare, engineering services, and AI-linked digital services. Early previews indicate better execution and margin improvement from this segment. From a valuation standpoint, the sector has derated and is trading closer to its long-term average. While high-growth tailwinds of the pandemic years have faded, the sector offers reasonable entry points for long-term investors willing to ride out near-term demand uncertainty. Cost efficiency, GenAI adoption, and vendor consolidation deals could drive outperformance for well-positioned firms. As of June 2025, key indices like the Sensex are trading at nearly 24.7 times trailing PE and nearly 3.7 times P/B, which are above their 10-year averages. This elevated valuation comes after a sharp June rally driven by the RBI's front-loaded rate cuts, falling crude prices, and foreign inflows. In this context, a prudent equity investment strategy would involve: Bottom-up stock selection: Focus on fundamentally strong companies with stable earnings visibility, robust cash flows, and sectoral tailwinds, particularly in financials, manufacturing, healthcare, and select midcap IT. Maintain valuation discipline: Avoid chasing momentum in overvalued stocks or sectors. Seek opportunities where growth is not fully priced in, especially in sectors benefiting from reforms, PLI, or rising domestic demand. Diversify across market caps: While large caps offer safety in uncertain times, select mid and small caps with solid fundamentals and reasonable valuations can provide alpha as the cycle broadens. Use volatility to build exposure: Geopolitical risks, global rate uncertainty, and election-driven policies may trigger short-term corrections. These should be used to accumulate quality names rather than exiting in panic. Read all market-related news here Read more stories by Nishant Kumar Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of the expert, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
