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RAKBANK achieves 28% growth in first quarter profit
RAKBANK has reported a net profit of AED 293.1 million for the quarter ended 31st March 2011, reflecting a 28.5% growth compared to the first quarter of 2010 and 7.4% over the fourth quarter of 2010.
“The Bank’s first quarter net profit reflects the growth in RAKBANK’s customer base across a wide range of personal and small business segments, which is largely driven by our continual focus on excellent customer service,” said Graham Honeybill, RAKBANK General Manager.
RAKBANK’s net interest income grew by 19.4% to AED 445.2 million compared to 31st March 2010. Gross Loans and Advances stood at AED 17.6 billion an increase of 4.8% over 31st December 2010 and an increase of 19.3% compared to 31st March 2010. Fee and commission income was up by 34.9% compared to 31st March 2010 to AED 186.6 million, a reflection of increased volumes of processed business year-on-year.
The Bank has taken adequate provisions on its loan portfolio during the three months. Total impairment charge for the quarter, which stood at AED 78.6 million, was lower by AED 2.6 million compared to the same period last year.
“RAKBANK continues to follow a measured approach to expansion, with a focus on maintaining a consistent and sustainable level of growth through a careful lending policy, while actively seeking new opportunities in the market such as the launch of RAKBANK Prepaid Cards and the expansion of the Bank’s e-solutions portfolio to include www.rakbankdirect.ae and, more recently, Mobile Banking,” added Honeybill.
Total assets as at 31st March 2011 were AED 22.3 billion, an increase of 4.3% over 31st December 2010 and a 22.3% increase compared to 31st March 2010. The growth in the asset book has been supported by a combination of increases in customer deposits and shareholders’ equity. Customer deposits were up by AED 1 billion, a 6% increase from 31st December 2010 and a 28.6% increase compared to 31st March 2010 from a combination of term and transaction deposits.
During the quarter, RAKBANK purchased investments worth AED 225.9 million, and investments totalling AED 55.1 million matured leaving an outstanding portfolio of AED 944.7 million at the end of March. The Bank intends holding all investments to maturity and does not anticipate any loss on any of its investments, all of which are in the names of domestic institutions.
RAKBANK’s advances to deposits ratio stood at 92.5% as per the Central Bank of UAE guidelines and the Bank’s liquid asset ratio was comfortable at 18.1% of total assets.
The Share capital of the Bank increased to AED 1.39 billion from AED 1.15 billion after distribution of a 20% stock dividend. Total shareholder’s Equity stood at AED 3.78 billion at the end of March.
RAKBANK’s capital adequacy ratio as per Basel I at end of the quarter was 18.9% composed entirely of Tier 1 capital against a current minimum of 12% of Tier 1 capital prescribed by the Central Bank of the UAE. If the 7 year loan of the Ministry of Finance is taken into account, which is eligible to be treated as Tier 2 capital, then the overall capital adequacy ratio stands at 22.6%.
Ratings
The current ratings are detailed below:
| Rating Agency | Deposits | Financial Strength | Outlook | Support |
| Moody’s | Baa1 / P-2 | D+ | Stable | - |
| Fitch | BBB+ / F2 | - | Stable | 2 |
| Capital Intelligence | A-/ A2 | BBB+ | Stable | 2 |
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About RAKBANK
RAKBANK, also known as the National Bank of Ras Al-Khaimah, is a leading retail bank in the UAE, serving over 400,000 customers. Founded in 1976, the Bank is one of the country’s oldest local financial institutions and today one of its fastest growing, most dynamic banks and a major player in the personal banking and small business sectors in the UAE.
The Bank offers a wide range of personal banking services through its 30 branches and telephone and online banking channels. It is a leading provider of credit cards and a prominent player in mortgage finance and small to medium enterprise finance.
Customer service excellence is a cornerstone of the Bank’s success, with the bank having been voted in 2010 for five years running as #1 Bank in Customer Service in the UAE Annual Bank Benchmarking Study. For more information, you can visit www.rakbank.ae or contact the Call Centre at +9714 213 0000. You can also connect to RAKBANK via twitter.com/rakbanklive and facebook.com/rakbank.
