Mashreq Bank, the Dubai lender controlled by the Al Ghurair family, reported a 5.4 per cent year-on-year rise in second-quarter net income as allowances for non-performing loans dropped. Net income for the three months ending June 30 climbed to Dh593 million, the lender said in a statement on Monday. Impairment charges for the reporting period fell 23.1 per cent to Dh221m. A 32.2 per cent surge in income from investments also supported the lender’s quarterly earnings, it added. Net profit for the first six months of 2019 also climbed 5.2 per cent to Dh1.2 billion as the impairment allowance for loans and advances shrunk by 18.2 per cent year-on-year, Mashreq said. Total provisions for loans and advances reached Dh4bn, constituting 128 per cent coverage for non-performing loans. Its non-performing-loans-to-gross-loans ratio declined slightly to 3.5 per cent at the end of June 2019, it added. “Our impairment allowance is down … our loan-to-deposit ratio remained robust as of the end of Q2 of 2019,” said Mashreq chief executive Abdulaziz Al Ghurair. “I am confident we will maintain our strong position as long as we continue to follow our customer-centric strategy and innovate." Mashreq, which plans to spend Dh500m on digital transformation over the next five years, has made immense strides in improving the banking experience for its customers in the first half, Mr Al Ghurair said. “The banking landscape in the region is changing at a rapid pace where having a sound digital infrastructure is a prerequisite for any bank to succeed,” he said. “Mashreq has been at the forefront of embracing technology and will continue to introduce innovative services and products to meet the ever-evolving customer needs.” Mashreq which also reported a <a href="https://www.thenational.ae/business/banking/dubai-mashreq-reports-5-jump-in-q1-net-income-as-provisions-decline-1.852341">5 per cent rise in its first quarte</a><a href="http://www.thenational.ae/business/banking/dubai-mashreq-reports-5-jump-in-q1-net-income-as-provisions-decline-1.852341">r</a> net income plans to shut half of its branches in the UAE this year, replacing the physical infrastructure with digital "branches", Mr Al Ghurair, told <em>The National</em> in a March interview. The bank has seen declining need for conventional brick-and-mortar locations as technology evolves. About 97 per cent of Mashreq's transactions are taking place on a digital platform, he said at the time. Like their peers globally, banks across the Arabian Gulf are investing in digitising their operations and moving away from the traditional branch business model. Mashreq’s strategy is in line with a growing trend in the financial industry because large branch networks are expensive to operate and maintain. “Our branch transformation strategy is the first initiative of its kind in the region, and we strongly believe it will help to redefine banking in the Middle East,” Mr Al Ghurair said on Monday.