RAKBANK Reports Net Profit of AED 906.5 million for first Nine months of 2011

The National Bank of Ras Al-Khaimah (P.S.C.) (RAKBANK) has reported a net profit of AED 906.5 million for the nine months ended 30th September 2011, reflecting a 24.2% growth compared to same period of 2010.

“We are pleased with RAKBANK’s strong financial results which reflect growth in the Banks’ customer base across major business segments,” says Graham Honeybill, Chief Executive Officer of RAKBANK. “As we continue to place great focus on customer service and follow our sound business strategy, we are confident that we will continue to achieve positive results.”  

Funded Income

RAKBANK has continued to follow a measured approach to expansion, with a focus on maintaining a consistent and sustainable level of growth through a careful lending policy. The Bank actively seeks new lending in its chosen fields and has seen growth in both small business and personal finance segments.

The Bank’s interest income grew by 23.8% to AED 1.5 billion compared to 30th September 2010. Gross Loans and advances stood at AED 18.4 billion an increase of 9.7% over 31st December 2010 and an increase of 13.7% compared to 30th September 2010.

During the nine months in 2011, the bank has taken adequate provisions on its loan portfolio.  Total impairment charge for the nine months was AED 223 million against the charge of AED 210.3 million made during the same period last year. The increase was mainly due to an additional provision of AED 10 million made during 3rd quarter of 2011.  

Fee and Commission Income

Fee and commission income at AED 416.2 million was up by 2.5% compared to 30th  September 2010. While a marginal growth recorded on full year basis, income for 3rd quarter fell by 18% over the same period last year due to new Central Bank of UAE regulation on lending and fees which came into effect from the month of May. 

“The Bank will continue to invest in product development, technology and other delivery channels to ensure that we are providing a full range of products and services to our valued customers,” added Honeybill.

Assets & Liabilities

Total assets as of 30^th September 2011 were AED 23 billion, an increase of 7.7% over 31^st December 2010. The main growth in assets was seen in loans and advances.

During the nine months bank purchased investments worth AED 460.8 million and investments totalling AED 55.1 million matured. Total Investments stood at AED 1.2 billion at the end of September 2011. The bank intends holding all investments to maturity and does not anticipate any loss on any of its investments.

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 an increase on 6.1% from 31st December 2010 and a 7.9% increase compared to 30th   September 2010 from a combination of term and transaction deposits. 

The Bank’s advances to deposits ratio stood at 92.5% as per the Central Bank of UAE guidelines. The bank’s liquid asset ratio was comfortable at 16.5% of the total assets.

The share capital of the bank increased to AED 1.39 billion from AED 1.15 billion after distribution of 20% stock dividend.  Total shareholder’s equity stood at AED 4.4 billion at the end of September 2011.

Capital Adequacy

The Bank’s capital adequacy ratio as per Basel I at end of the quarter was 17.8% 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 we consider Ministry of finance loan which qualifies as tier 2 capital then the overall capital adequacy ratio stood at 21.2%.

Ratings

The current ratings are detailed below:

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About RAKBANK

RAKBANK, also known as the National Bank of Ras Al-Khaimah, is a leading retail and small to medium business 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 and most dynamic banks in the UAE.

RAKBANK offers a wide range of personal and business banking services throughout its 31 branches, as well as its telephone, Online, and Mobile banking channels. The Bank is a leading provider of credit cards and a prominent player in mortgage lending and small to medium enterprise finance.

Customer service excellence is a cornerstone of RAKBANK’s success, the Bank having been voted in 2010 for the fifth consecutive year as #1 Bank in Customer Service in the UAE Annual Bank Benchmarking Study. For more information, you can visit www.rakbank.ae, www.rakbankdirect.ae, or contact the Call Centre on +9714 213 0000. You can also connect to RAKBANK via twitter.com/rakbanklive and facebook.com/rakbank.