Mashreq Bank, one of the leading financial institutions in the MENA region, has delivered a strong first-quarter performance, with operating income growing to AED3.4 billion ($925.8 million) and net profit before tax increasing to AED2.3 billion ($626.28 million).

Net profit after tax was AED1.9 billion ($517.36 million).

The results demonstrate the resilience of Mashreq’s globally diversified franchise through an extraordinary regional environment, supported by a strong liquidity position and uninterrupted operations across all channels, said the bank.

“The first quarter of 2026 has taken place against a backdrop of heightened geopolitical tension in the region, and yet it has reaffirmed the structural resilience of the UAE and the wider GCC economies and the strength of its financial system, both of which continue to provide stability and confidence even in periods of uncertainty,' said Abdul Aziz Al Ghurair, Chairman, Mashreq.

The UAE and the broader region’s disciplined fiscal management, strong external position, and sustained momentum in non-oil sectors have enabled the banking sector to operate from a position of liquidity, capital strength, and operational continuity, reinforcing its role as a reliable enabler of economic activity across cycles.

"Within this context, Mashreq delivered a robust performance in the first quarter, with operating income of AED3.4 billion and a return on equity of 20 percent, reflecting the strength of its diversified business model and the consistency of its execution across a broad range of markets and client segments," he said.

Ahmed Abdelaal, Group Chief Executive Officer, Mashreq, said: “The first quarter of 2026 has been shaped by a highly complex operating environment, and our priority throughout has been to provide clarity, continuity, and consistency for our clients across the region. Against this backdrop, Mashreq delivered a net profit before tax of AED2.3 billion, with non-interest income contributing 41% of total operating income, demonstrating the strength of a business model that is increasingly diversified and anchored in client activity.

"This performance reflects deliberate choices we have made over time, including disciplined risk management, a strong funding base, and a continued focus on building deeper and more resilient client relationships. Balance sheet growth has remained robust, while asset quality continues to track at levels that are among the strongest in the sector, reinforcing the stability of the franchise.

"In the current environment, our approach has been to engage earlier and more actively with our clients, particularly around liquidity, refinancing, and risk planning, ensuring that decisions are taken with full context and with a clear emphasis on resilience. We remain fully open for business, but we are doing so with discipline and a high degree of selectivity," he said.

"The strength of our operating platform has ensured uninterrupted service across all products and geographies, supported by close alignment between risk, treasury, operations, and coverage teams, as well as well-established business continuity frameworks that have been actively executed during the quarter.

"Mashreq’s position at the centre of key global trade and capital corridors continues to support strong cross-border flows, with our transaction banking and US dollar clearing capabilities enabling clients to navigate shifting market dynamics with confidence and continuity," he added.

Performance Review Q1 2026

Customer loans grew 33% and total assets expanded 26% year-on-year. Non-interest income contributed 41% of total operating income, underscoring the continued diversification of the Bank's revenue mix and the strength of its fee-generating businesses.

Amid the regional conflict that shaped Q1 2026, Mashreq continued to operate with resilience across the UAE and its international markets. All banking services, digital platforms and client channels have functioned without disruption and the bank's capital position, liquidity and funding profile remains strong and comfortably above regulatory requirements. 

Revenue and Income

• Net Interest Income grew 4% year-on-year to AED2.0 billion. While the cumulative impact of 175 basis points of UAE Central Bank rate cuts since H2 2024 continued to compress margins, with NIM declining to 2.7%, this was more than offset by 33% growth in the customer loan book. The CASA ratio of 63% continued to anchor the Bank's low-cost funding base, containing the impact of rate movements on net interest earnings. NIM compression moderated sequentially as the majority of the rate-cut cycle has now been absorbed through asset repricing.

• Non-interest income rose 20% year-on-year to AED1.4 billion, now at 41% of total operating income.

• Fees and Commissions increased 35% year-on-year to AED0.5 billion, driven by higher transaction volumes across trade finance and payments, increased Financial Markets-related fees and commissions from the revamp of the Bank's Treasury and Global markets platform and client engagement across the Bank's transactional banking activities.

• Insurance, FX and Other Income grew 26% year-on-year to AED0.9 billion, reflecting stronger cross-border flows across Mashreq's global corridors, anchored by the bank's position as the only non-US bank in the region with direct US dollar clearing capability.

• Net Investment income was AED48 million for the quarter, lower year-on-year, as mark-to-market gains moderated in the current rate environment and against a Q1 2025 comparable that included elevated realised gains.

• Cross-Sell Ratio increased to 41%, approximately 350 basis points higher year-on-year, with continued multi-product adoption and deepening relationships across retail, SME and wholesale segments.

Expenses and Efficiency

• Operating expenses of AED1.1 billion grew 15% year-on-year, driven by targeted investment in Gen-AI initiatives, digital onboarding infrastructure and the continued build-out of Mashreq's international network, with the Cost-to-Income Ratio sustained at 31%.

• Income growth and efficiency gains from digitalization continued to absorb the incremental investment cost through the quarter, preserving a cost base well below industry benchmarks without constraining strategic spend.

Earnings Performance

Strong profitability and superior returns delivered through record balance-sheet growth and resilient earnings quality

• Net profit before tax reached AED2.3 billion in Q1 2026, with net profit after tax of AED1.9 billion, translating scale, revenue diversification and cost discipline into strong, high-quality earnings despite continued rate compression.

• Return on equity of 20% and return on assets of 2.2% reaffirm Mashreq's continued ability to generate high-quality returns through efficient capital deployment and a growing fee income base. 

- TradeArabia News Service