The National Bank of Ras al Khaimah (RAKBANK) today announced a consolidated net profit of AED 716.2 million for the half-year ended 30 June 2015. The Group’s total income grew by 12.2% to AED 1.9 billion during the half-year compared to the same period last year as a result of an increase of 12.9% in net interest income and 9.8% in non-interest income.

Operating expenses inched up by 3.0% during the first six months of the year compared to the previous year. However cost-to-income ratio dropped to 40.0% from 43.6% as the Bank continues to grow its income base and focus on cost optimisation. The consolidated operating profit before provision for impairment jumped by 19.2% to AED 1.1 billion while the total impairment charge for the half year stood at AED 426.9 million compared to AED 258.4 million in the first half of 2014.

“Despite rising competition in the UAE banking market, the Group continues to record further improvement in year-on-year operating income and expense ratios,” said Peter England, RAKBANK Chief Executive Officer. “Gross loans and advances increased by 16.0% year-on-year to AED 27.7 billion by the end of the first half of 2015 across most of the Bank’s Retail and Business Banking portfolios. SME and Commercial lending under our Business Banking segment, which has been a focus for the Bank since early 2014, recorded a jump of 115.0% in gross loans and advances year-on-year. As a result of this growth in overall lending volumes, our impairment charge was higher than what we saw in the previous year however our non-performing loans remained steady at 2.7%,” explained England.

Towards the end of May 2015, RAKBANK acquired 79.23% of Ras Al Khaimah National Insurance Company P.S.C. (RAK Insurance) to become the largest shareholder in the insurance provider. “With a controlling stake in RAK Insurance, we look forward to collaborate on developing and providing insurance products to enhance revenue and market share and ensure that customers enjoy a more wholesome experience,” said England.

Total assets grew by AED 3.2 billion compared to 31 December 2014 mainly as a result of strong growth in gross loans and advances which were up by AED 1.9 billion to AED 27.7 billion and the consolidation of RAK Insurance amounting to AED 615.8 million. Total assets stood at AED 38.1 billion on 30 June 2015. Customer deposits grew by AED 1.4 billion to AED 26.1 billion during the first half of 2015 compared to 31 December 2014.

The Bank’s capital adequacy ratio as per Basel II requirement at the end of the quarter is 23.7%, comprising entirely of Tier 1 capital. This is against a current minimum total capital ratio of 12.0% prescribed by the Central Bank in the UAE. At the end of the quarter, the regulatory liquid assets ratio was 18.6% and advances to stable resources ratio was 87.7%. Total shareholder’s equity totalled AED 7 billion including six months’ profit.

“Looking ahead, we will continue to aggressively grow the bank’s top line in the second half of the year while strengthening our branch and ATM network across the country and launching additional digital banking solutions,” added England. The Bank is constantly working to find new ways to improve the customer experience through innovation, service excellence, and customer convenience. During the quarter, RAKBANK was recognized by The Asian Banker as Best Mobile Banking Initiative in the Middle East for 2014 for MobileCash card-less cash withdrawal solution and Best SME Bank in the Middle East.