Dubai-based Mashreqbank's net profit has plunged by 38% to Dh 435 million in the second quarter of 2009 from Dh 706.86 million for the same period in 2008.

The sources said that the lender booked provisions of Dh319 million in the latest three month period. Total provisions stood at Dh551.4 million in the first half of 2009, compared with Dh 200.3 million in the same period previous year.

The bank stated in a communiqué that its revenues for the second quarter totalled Dh1.2 billion while the operating expenses decreased to Dh 440 million, a drop of eight per cent quarter-on-quarter.

The net interest income and income from Islamic products surged by 5.2%, from Dh 1.01 billion in H1 2008 to Dh 1.06 billion in H1 2009.

Customer deposits reached Dh 56.8 billion at the end of June against Dh51.5 billion at the end of December 2008, registering a jump of 0.3%. Total assets for the first six months of 2009 surged by 3.7 per cent to Dh 96.7 billion.

The bank's capital adequacy ratio also witnessed an impressive growth of 20% per cent against 14.1 per cent last year after the conversion of deposits from the Ministry of Finance.