ArabWeeks

Mashreq, one of the UAE’s leading financial institutions, has reported a 35% increase in its Net Profit for the first nine months of 2014, climbing to AED 1.76 billion compared to AED 1.30 billion at the end of September 2013.

The bank’s Total Operating Income for the period grew to AED 4.3 billion, an increase of 24% compared to a year earlier, driven by both Net Interest Income and Net fee and commission income.

The bank’s Net Interest Income at the end of September 2014 was up by 33% compared to a year earlier, driven by 18% year-on-year increase in loan volume and 27 bps improvement in net interest margin from 2.91% in September 2013 to 3.18% this year, which was predominantly a function of a change in balance sheet structure.

Mashreq’s best-in-class Net Fee, Commission and Other Income to operating income ratio remained high at 48.6% led by 18% growth in Net Fee and Commission Income and 38% growth in Investment Income as compared to September 2013.

General and Administrative Expenses for the period increased by 7% compared to a year earlier to reach AED 1.6 billion; however Mashreq’s Efficiency Ratio improved from 43% in September 2013 to reach 37.3% at the end of September 2014.

Earnings per share strengthened to AED 10.39 at the end of September this year compared to AED 7.70 a year earlier.

Asset quality continued to improve as Non Performing Loans to Gross Loans ratio reduced from 6.0% in December 2013 to 5.7% at the end of September 2014. Mashreq’s Provisions for Loans & Advances, for the nine months, stood at AED 860 million, and Total Provisions for Loans & Advances reached AED 3.84 billion, constituting 110% coverage for Non Performing Loans as on September 30, 2014.

Mashreq’s Capital Adequacy ratio and Tier 1 capital ratio continue to be significantly higher than the regulatory limit and stood at 16.4% and 14.9% respectively, at the end of September 2014.

Mashreq’s CEO, H.E. AbdulAziz Al Ghurair, said: “The Bank continues to deliver exceptional results for the first nine months of the year with an increase of 35% in net profits. All the Bank’s businesses are doing exceptionally well, with each division delivering stellar returns. Our customer-centric financial services never fail to delight our customers. Customers in the UAE demand innovation, they demand new ideas, new ways that suit their latent needs and Mashreq remains in the forefront by leading this new wave.”

He continued, “While the banking industry in the UAE remains a crowded and competitive arena, there are huge opportunities too. The World Economic Forum’s annual Global Competitiveness Index recently showed that the UAE Economy is the highest rated in the Arab world, ranking it 12th out of 144 countries. This is further evidence of the strength of the economic recovery that we are witnessing and the shape of things to come in the near term and spelling a bright future for the banking sector as a whole.”

In its third quarter results statement, Mashreq’s Total Assets increased by 14% to reach AED 102.3 billion, compared to AED 89.7 billion at the end of 2013. Liquid

Assets to Total Assets stood at 26% with Cash and Due from Banks at AED 26.8 billion at the end of the third quarter.

Loans & Advances grew by 14% during the first nine months to reach AED 57.3 billion, compared to AED 50.4 billion at the end of December 2013. Customer Deposits also increased by 14%, during the same period, to stand at AED 66.8 billion at the end of September 2014.

The Bank’s Loan-to-Deposit ratio and Loan-to-Asset ratio remained the same as of December 2013 – 86% and 56% respectively.

Operational update: After a strong H1, Mashreq Qatar continues to provide customers with the most rewarding banking experiences: Mashreq Qatar became the first bank in Qatar to offer Salaam reward points, which offers a loyalty program based on the customer’s entire banking relationship, not only credit card purchases.  Customers earn reward points when they make a deposit, obtain a loan, or spend on their credit card and can redeem them instantly through mobile and online banking at leading outlets in Qatar, including Sharaf DG, Homes R Us and Dnata Travels.

In 2014, Mashreq became the first bank in the region to introduce a simplified application process for ALL banking products using one page application form, which includes mandatory FATCA forms. Mashreq also launched innovative deposit products: Advance Fixed Deposits; in which the entire interest is paid upfront to the customer; Step Up Savings account, whichoffers high interest rates as the customer’s balance increases; and the Secured Overdraft,  against investment products like Certificates of Deposits, Mutual Funds and reverse convertibles.

Mashreq successfully launched instant cash-backed credit cards against all deposit products offered by the Bankand in 2014, the bank introduced Mashreq Privileges, the largest card discount program in Qatar, offering discounts to its Platinum Elite Credit Card holders at over 100 outlets in Qatar.  Mashreq Qatar improved it’s priority banking offering by introducing Platinum debit cards with lifestyle benefits including free travel insurance for Shengen countries, free Al Maha service at Hamad International airport (twice a year), free Marhaba service at Dubai International Airport (twice a year), supplementary debit cards and many more.

Mashreq improved the Majestic loan proposition by upgrading the gift to an iPad Air for customers availing a loan of QAR 300,000 and above.  Mashreq Qatar utilized it’s regional network to offer Mashreq Flavours to customers, where they can benefit from discounts in over 750 hotels & restaurants across the UAE. To facilitate business banking customers, automated intimation of legal documents expiry through SMS has also been introduced.   In addition, Mashreq bank offers another unique feature to ensure that the customer contact details are conveniently updated, where all customers can now update their mobile numbers instantly through any Mashreq ATM – with no need to visit any branch.  The “Snapp” mobile banking platform has also been upgraded to include Windows devices (in addition to Android, Blackberry and iOS, which were already covered).

Mashreq also launched the Customer Relationship Manager (CRM) Microsoft based system that helpsto enhance the customers banking experience. The new system allows customers to apply for products, request services or even talk about their experience with the bank. Mashreq has always been innovative and has become the first bank in Qatar to launch the concept of Loan Fair in Branches where customers can walk in with the required documents for instant loan approvals and disbursement the next day.

Awards:

Mashreq was recently awarded by Global Finance the award for the “Best Consumer Internet Bank in Qatar” for the sixth year in a row. In addition Mashreq has also been recognized as the “Best Regional Retail Bank” by Banker Middle East Industry Awards 2013. Mashreq received three additional awards this year for “Best Commercial Bank in Qatar” in 2014 from World Finance Magazine of the UK , “Best Customer Service Bank in Qatar” in 2014 and “Best Corporate Bank in Qatar” in 2014 by Global Banking & Finance Review in the UK.

The German Saudi Arabian Liaison Office of Economic Affairs (AHK Saudi Arabia) has organized the first press conference of NürnbergMesse, one of the largest exhibition organizers in the world. Mr. Thomas Schlitt, Director International Sales & Business Development of NürnbergMesse, hopes to reach similar participant figures for 2015 as for this year when around 27,000 exhibitors (international share: 39 %) and up to 1.13 million visitors (international share of trade visitors: 22 %) flocked onto the Nuremberg exhibition grounds. This year, for example, a high-ranking delegation from Saudi Arabia, headed by the Ministry of Agriculture and the Saudi Organic Farming Association, visited BIOFACH, which is the world’s largest trade fair for organic food and agriculture. It is held each year in the month of February, in Nuremberg. “We are confident to have more successful participations from Saudi Arabia in 2015”, Mr. Schlitt said. NürnbergMesse also organizes the world’s leading trade fair for Air conditioning and Refrigeration, Chillventa. As energy efficiency and sustainability remain important factors for Saudi Arabian industry, this event is a great opportunity to view the whole variety of products and services from the industry’s broad-based spectrum of refrigeration, air conditioning, ventilation and heat pumps.  The portfolio of NürnbergMesse, which is officially represented in KSA by the German Saudi Arabian Liaison Office of Economic Affairs (AHK Saudi Arabia), covers around 120 national and international exhibitions and congresses at the Nürnberg location and worldwide. NürnbergMesse Group is present with subsidiaries in China, North America, Brazil, Italy and India. The group also has a network of approximately 50 representatives operating in more than 110 countries. With altogether 20 exhibitions worldwide it is a permanent player in the international exhibition market. Here the group is not limited to one main theme, but is distinguished by its successful mix of themes. “NürnbergMesse with all its events, showcasing the latest innovation in all fields, could be of crucial importance as a partner platform for transfer of technology and know- how to KSA,” said Andreas Hergenroether, Delegate of the German-Saudi Arabian Liaison Office for Economic Affairs. For this reason the German-Saudi Arabian Liaison Office for Economic Affairs is planning to organize delegation trips from Saudi Arabia to the NürnbergMesse events. Although there have been many Saudi Arabian participations in the past, Hergenroether still sees huge potential for the future.

Cruise Arabia – the collaborative initiative formed by Oman’s Ministry of Tourism, Abu Dhabi Tourism & Culture Authority (TCA Abu Dhabi) and Dubai’s Department of Tourism and Commerce Marketing (DTCM) to promote the Arabian Gulf as a cruise destination – kicked off its third annual GCC roadshow with an event at the Park Hyatt hotel in Jeddah today.

Designed to keep the region’s travel trade professionals up-to-date on the cruise tourism sector and to help drive intraregional cruise tourism, particularly with families, the roadshow is visiting three cities in the Kingdom of Saudi Arabia – Jeddah, Riyadh and Al Khobbar – as well as Kuwait City, Kuwait from today until 22 October 2014.

The tourism authority partners will meet with hundreds of local tour operators and travel agents over the course of the four-day, four-city roadshow. The Cruise Arabia partners are also joined on the roadshow by representatives from three of the world’s leading cruise companies – Costa, MSC Cruises and Royal Caribbean International.

Hamad Mohammed bin Mejren, Executive Director, Business Tourism at DTCM, said: “This roadshow is designed to help build awareness of cruise tourism, familiarise travel professionals with cruise itineraries in the Arabian Gulf, and ultimately drive an increase in the number of GCC tourists taking voyages by cruise in the region.  At present, a significant number of GCC travellers are not fully aware of the many attractions of cruise holidays, which include perks such as free travel and accommodation for children, stunning on-board amenities and entertainment, and outstanding itineraries which range from just a few days to several weeks. This roadshow – now in its third year – helps to educate and inform travel trade professionals, so that they in turn can educate and inform their customers.

“Earlier this year, the new multi-entry UAE visit visa for cruise tourists that was announced. At just 200 dirhams (c.US$50) this makes it easier than ever for expatriate families living in the region, as well as overseas visitors, to  cruise in the Arabian Gulf.  We expect this to further contribute to the growth of cruise travel. Our forecasts for this year are already up – in Dubai we will welcome a total of 110 ship calls carrying around 381,500 passengers in comparison to 93 ship calls carrying 320,000 passengers last year.”

Sultan Al Dhaheri, Acting Executive Director Tourism, Abu Dhabi Tourism & Culture Authority said: “We are taking the cruise industry’s expanding Arabian Gulf cruise itineraries to the GCC market to raise awareness and demand for this exciting product. Cruise ships these days offer a level of luxury and family entertainment which will suit the regional consumer, whether national or expatriate. Our rationale is simple – the more demand we create, the more our cruise partners will expand their offering. Everyone wins.”

Khalid Al Zadjali, Director of Tourism Events, Oman Ministry of Tourism, said: “We are excited to be a part of Cruise Arabia’s series of road shows, which aim to position the Arabian Gulf as a premier cruise destination. Oman, in particular, has become a highly-preferred tourist attraction for tourists and visitors coming to the Middle East region and is widely attributed to the country’s year-long tourism season. In fact, Oman has also started to position itself as a choice destination for cruises. In 2013, a total of over 177,000 cruise passengers visited the Sultanate, which reflects the country’s continuing increase in cruise ship activity via its three main ports; Khasab Port, Salalah Port and Muscat Port. Oman is a country with a rich culture and heritage accompanied with attractive spots like pristine beaches, traditional souks, castles and fortresses, natural wilderness and adventure experiences that make it a must see cruise destination of choice and an ideal pre- and post-touring location, which is the main reason why it was able to attract over 2.1 million tourists last year.”

Formed in September 2013 with a shared aim to grow and evolve the cruise tourism segment, the Cruise Arabia partners have committed to making a significant investment to the cruise industry across the region, developing its segment infrastructure and creating current and future employment opportunities. A key aim of the partnership is to encourage a new generation of tourists to cruise in the Arabian Gulf and the Gulf of Oman, spanning new travellers from traditional markets in Europe and North America as well as those from emerging markets including China, India and the GCC.

The latest World Gold Council Gold Demand Trends report, covering the period April – June 2014, shows that global gold demand continues to demonstrate a return to long-term trends after an exceptional year in 2013. Total global gold demand in Q2 stood at 964 tonnes (t), 16% lower than the same period last year, as consumers and investors pulled back and consolidated their activity.

Global jewellery demand, which represents more than half of total global demand, was unsurprisingly down 30% year-on-year to 510t. In comparison Q2 2014 was 11% higher than Q2 2012, extending the broad upward trend evident since 2009. India and China remain significant drivers of the global jewellery market, purchasing 154t and 143t respectively. In what is traditionally a quieter quarter for jewellery, consumers continued to digest opportunistic purchases made in 2013 and adopted a more “needs” based approach to their jewellery buying.  Indian jewellery buying was also affected by high value purchases being restricted in the run up to the election and the continued impact of import restrictions on gold. Meanwhile, there were continued signs of recovery in some Western markets as jewellery demand in the US rose by 15% to 26t and the UK rose 21% to 4t as consumer confidence continued to grow in line with the economy and yellow gold came back into fashion.

Central banks bought 118t of gold in Q2 2014, a rise of 28% versus the same period last year. It was the 14^th consecutive quarter in which central banks were net purchasers of gold driven by a number of factors, including a continued diversification away from the US dollar and the backdrop of ongoing geopolitical tensions in Iraq and Ukraine.

Total investment demand (investment in bars and coins combined with exchange-traded funds (ETF) investment) was up 4% to 235t. Investment in bars and coins stood at 275t for Q2 2014, a fall of 56%, following unprecedented levels of buying during the same period last year. In Q2 2014, many investors were uncertain about the direction and momentum of the gold price, while traders in price sensitive markets were far less active due to low volatility. The quarter did see an improvement in investor sentiment towards ETFs compared to last year. Outflows stood at 40t for the quarter, a tenth of the redemptions seen in the same quarter a year ago. The bulk of these outflows occurred at the beginning of the quarter, turning to marginal inflows by the end.

Marcus Grubb, Managing Director of Investment Strategy at the World Gold Council said: “In the context of an exceptional year last year where we saw record consumer buying and investor sell-offs, this quarter’s demand continues to demonstrate a return to long-term trends, illustrating the uniquely balanced nature of the gold market. Jewellery consumers continued to digest the exceptional purchases of 2013 and investors also rebalanced, pulling back from the extremes we saw last year. Overall the gold market is stabilising following the extraordinary conditions we saw in 2013.”

In value terms, gold demand in Q2 2014 was US$40bn, down 24% compared to Q2 2013. The average gold price of US$1,288/oz was down 9% on the average Q2 2013 price.

The key findings from the report are as follows:

• Central banks increased purchasing by 28% to 118t compared with the same period last year, as they continued to use gold as a hedge against risk and diversify away from the US dollar.
• Total investment demand (combined investment in bars and coins and ETFs) was up 4% to 235t. However, there was a 56% decrease in bar and coin demand from 628t in Q2 2013 to 275t in Q2 2014 following unprecedented levels of demand last year. ETF outflows were 40t, a tenth of the outflows seen in the same period last year
• Taken together, these factors show that gold demand is reverting to  long term trends after an extraordinary 2013.
• Total supply for the quarter was up 10% year on year solely due to the growth in mine supply.
• H1 recycling is the lowest since 2007 although the figures for Q2 2014 are up 1% to 263t compared to last year – a relatively low figure compared to the historical average.

Gold demand and supply statistics for Q2 2014

• Gold demand for Q2 2014 was 964t, down 16% year on year from 1,148t
• Central bank purchases rose 28% year on year, to 118t from 92t
• Total bar and coin demand fell by 56% year on year, to 275t from 628t
• ETF outflows were 40t, a tenth of the outflows seen in the same period last year
• Total jewellery demand fell by 30% year on year, to 510t from 727t
• Technology demand came in at 101t, down 3% versus the same period last year
• Total supply increased by 10% to 1,078t. We expect supply to peak in 2014 and plateau over the next 4-6 quarters.

The Q2 2014 Gold Demand Trends report, which includes comprehensive data provided by GFMS, Thomson Reuters, can be viewedat http://www.gold.org/supply-and-demand/gold-demand-trends and a video can be seen here.