The National Bank of Ras Al Khaimah (RAKBANK) Group announced a consolidated net profit of AED 381.5 million for the half year ended 30 June 2017. The second quarter of 2017 generated profit of AED 226.7 million, an increase of 16% year on year and a 46.5% increase compared with the first quarter net profit. Gross Loans & Advances grew by 6.2% to AED 31.6 billion for the half year ended 30 June 2017 with strong growth in Wholesale Banking book and steady growth in the Personal Banking and Business Banking segments.  

Commenting on the financial results, RAKBANK CEO, Peter England, said: “The trends for the 1st half of 2017 are showing continued positive signs where solid progress is made by all business units being Wholesale Banking, Business Banking, Personal Banking, and Treasury. Total Income for the second quarter of 2017 increased by 2.1% over the previous quarter and impairments continue on a downward trend after peaking in Q3 2016. Impairments are still relatively high reflecting the nature of our legacy book, however we expect continued improvements in this area as the year progresses.”

Total Assets increased by 3.4% to AED 44.0 billion compared to the end of 2016. This was due to an increase in Gross Loans & Advances of AED 1.8 billion partially offset by a decrease in investments of AED 497.6 million. The healthy growth of corporate loans from Wholesale Banking and the steady progress of loans from the Business Banking and Personal Banking segments contributed to the increase of the Gross loans & Advances by 8.2% year-on-year. Likewise, Customer deposits grew by AED 1.2 billion to AED 30.6 billion, a 3.9% growth compared to the end of 2016. 

“Other than the financial performance, the Bank continues to invest in strategic areas and initiatives. During the quarter we commenced our partnership with C3 to open a completely new market segment where the Bank began offering payroll solutions for both banked and unbanked employees of companies. Additionally, we have expanded our remittance solutions by tapping into new corridors across Asia with plans to further expand in the second half of the year. With the aim of simplifying customers’ daily banking requirements, we were the first bank in the Middle East to introduce a new and innovative digital solution, Samsung Pay for ATMs. Looking ahead, the product and service pipeline for this year remains very strong, so expect to see continued product and service innovation from RAKBANK as the year progresses”, added England.

Total Income was AED 1.9 billion for the six months ended 30 June 2017, which increased by 2.1% for the second quarter of 2017 over the previous quarter, though declined by 2.8% over the comparable period in 2016. The Group’s Treasury, Wholesale Banking and Insurance business brought about strong growth in the non-interest income though the net interest income declined due to the changes made in the Bank’s business mix of lending. Operating expenses were marginally up year-on-year after the cost optimisation exercise in the first half of 2016 and the cost to income ratio stands at 37.4%. Impairments continued their downward trajectory from the peak in the third quarter of 2016, declining by 14.9% in the second quarter of 2017 over the previous quarter. Impairments during the six months ended 30 June 2017 were down by 2.4% from the comparable period in 2016.  

The Bank’s capital adequacy ratio as per UAE Central Bank regulations stood at 21.1% at the end of June 2017. This level of capital provides the Bank with ample room for growth in 2017. The regulatory eligible liquid asset ratio at the end of June 2017 was 14.9% compared to 16.9% at the end of 2016. The advances to stable resources ratio stood comfortably at 90.9% compared to 85.5% at the end of 2016.