RAKBANK Achieves Solid Growth in 2009 Profits

“The operating environment in 2009 was probably the most difficult the Bank has ever faced” said Graham Honeybill, General Manager. “Liquidity issues which materialised at the end of 2008 continued into the early part of 2009 and there was a significant increase in delinquencies in the retail segment.  Despite these considerable challenges the Bank continued to seek good business in line with its strategy and the results reflect the success of this effort. 

The Bank’s net interest income during the year increased by 37% compared to the previous year to reach AED1.23 billion.  Loans and advances stood at AED13.43 billion, an increase of 23% over 2008.  With the growth in business increases were seen in other operating income which at AED495 million was up 8% on the previous year.

The Bank’s capital adequacy ratio at the end of the year stood at 14.2% composed entirely of Tier 1 capital against the current minimum of 11% Tier 1 capital prescribed by the Central Bank of the U.A.E.  The Bank has converted the liquidity support loans given by the Ministry of Finance in 2008 into 7 year loans.  Because of the term of these loans they are eligible for Tier 2 status.  If that finance is also taken into account then the Bank’s overall capital adequacy ratio rises to 18.8% a figure which will be further enhanced on approval by the shareholders of the proposed dividend. 

Total assets were AED17.1 billion, a 23% increase from year end 2008.  Growth in assets was mainly due to increases in loans and advances in the retail segment in line with the Bank’s strategy. 

RAKBANK’s investment portfolio stood at AED398.33 million at the end of 2009 against AED645.07 million at the end of last year.  The decline was due to the maturity of investments.  The Bank has indicated that it intends to hold all bond investments to maturity with no loss expected on any of its investments. 

Growth in the Bank’s asset book has been supported by a combination of increases in customer deposits and shareholders equity.  Customer deposits increased by AED3.2 billion over the 12 month period due to a combination of term and transaction deposits.  During the year a AED360 million tranche of the medium term note programme matured and the Bank took advantage of favourable prices to redeem a further USD59 million of this programme which at the end of the year stood at USD291 million. 

The share capital of the Bank increased to AED962 million from AED740 million.  Total shareholders equity increased to AED2797 million at the end of the year.

Rating

The Bank is currently rated by the following leading rating agencies.  Their recent ratings are as follows:

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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 340,000 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 sector in the UAE.

The bank offers a wide range of personal banking services through its 27 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 2009 for four years running as #1 Bank in Customer Service in the UAE Annual Bank Benchmarking Study. For more information, visit www.rakbank.ae or contact the Call Centre at +9714 213 0000.

MediaContacts:

Lamis Daoud, Dir Tel: 971 4 2915055, mobile: 971 50 2601156, email: lamis.daoud@rakbank.ae