RAKBANK Posts 26% Growth in First Half Profit

RAKBANK has reported a net profit of AED 589.1 million for the six months ended 30^th June 2011, reflecting a 25.8% growth compared to the same period in 2010.

During the year, the Bank’s net interest income grew by 21.7% compared to 30^th June 2010 to reach AED 933.3 million.  Gross loans and advances stood at AED 17.9 billion, an increase of 6.7% over 31^st December 2010 and an increase of 15.7% compared to 30^th June 2010.

“The Bank’s six months result reflects the growth in the Bank’s customer base across a wide range of personal and small business segments, which is emphasized by RAKBANK’s competitive product offerings and award-winning customer service,” said Graham Honeybill, RAKBANK Chief Executive Officer.  

Fee and commission income at AED 307.9 million was up by 12.6% compared to 30^th June 2010, a reflection of increased volumes of business being processed during the six months. Following the introduction of the new Central Bank of the UAE guidelines for the retail banking segment, the Bank is diversifying its product range and expanding further into business customer segments.

RAKBANK is increasing its investments in product development, delivery channels, and technological integration to expand its e-solution portfolio and position RAKBANK at the forefront of Electronic Banking Solutions. The Bank’s portfolio of advanced e-solutions today includes Online and Mobile Banking, two Online Accounts (F@st S@ver and Evantage), and www.rakbankdirect.ae.

"The Bank remains vigilant and well positioned to benefit from changing trends and to take advantage of business opportunities, including online ventures, as and when they arise,” added Honeybill. With a positive outlook on the market, RAKBANK continues to expand its branch network across the UAE to complement its thrust in online services and has added two branches earlier in 2011 in Dubai and Abu Dhabi.

During the six months, the Bank has taken adequate provisions on its loan portfolio. Total impairment charge for the half year stood at AED 148.3 million, which was in line with the charge of AED 148.8 million made during the same period last year.

Total assets as at 30^th June 2011 were AED 22.6 billion, an increase of 5.8% over 31^st December 2010 and a 14.1% increase compared to 30^th June 2010. The main growth in assets was due to higher loans and advances and supported by a combination of increases in customer deposits and shareholders’ equity. Customer deposits were up by AED 675 million, an increase of 4% from 31^st December 2010 and a 15.4% increase compared to 30^th June 2010 from a combination of term and transaction deposits.

The Share capital of RAKBANK 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 4.1 billion at the end of June 2011.

During the six months, RAKBANK purchased investments worth AED 349.1 million and investments totalling AED 55.1 million matured. Total investments stood at AED 1.1 billion at the end of June 2011. 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.

The Bank’s advances to deposits ratio comfortably stood at 95.2% as per the Central Bank of UAE guidelines. The Bank’s liquid asset ratio was comfortable at 16% of total assets.

Capital Adequacy

RAKBANK’s capital adequacy ratio as per Basel I at the end of the quarter was 18.2% composed entirely of Tier 1 capital against a current minimum of 12% of Tier 1 capital prescribed by the Central Bank of the UAE. Taking into consideration the Ministry of Finance loan, which qualifies at Tier 2 capital, overall capital adequacy ratio reaches 21.8%.

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.