Mashreqbank Q1 profit hit by credit crunch

Mashreqbank, the UAE's second-largest lender by market value, posted its smallest profit growth in a year in the first quarter as the global credit crunch hit investment income and costs rose.

Net income in the three months to March 31 climbed 4.5 per cent to Dh465.3 million, compared with Dh445m in the year-earlier period, the United Arab Emirates bank said in a statement.

Investment income fell 28 per cent to Dh175m, while costs rose 32 per cent as the bank spent more on staff, infrastructure and technology, it said, without giving details.

The fall in investment income was "mainly due to the widening of credit spreads, and poor liquidity in the global and regional markets," it said.

Profit surged 20 per cent in the fourth quarter, 61 per cent in the second and fell in third, according to Reuters data.

Net interest income and income from products that comply with Islamic law surged 67 per cent to Dh412m during the quarter, and net fees, commissions and other income rose 12.8 per cent, the bank said.

Mashreqbank shares are up 14.5 per cent this year, the second-best performer of the 11 biggest publicly listed lenders.

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