The National Bank of Ras Al-Khaimah (RAKBANK) today announced a consolidated net profit of AED 445.5 million for the half-year ended 30 June 2016. The Group’s operating profit increased by 12.0% to AED 1.3 billion as a result of an increase in total income by 3.2% and a reduction in operating cost by 10.0%. The total income grew due to an increase in non-interest income by 22.3% partly offset by a reduction in net interest income and net income from Islamic financing by 2.2%.

Operating expenses declined by 10.0% during the first six months of the year compared to the previous year due to various cost saving initiatives taken by the Group. Furthermore, the Group improved its Cost-to-Income ratio to 34.9% compared to 40.0% in the first half of 2015, as it maintained its focus on cost optimization. The consolidated operating profit before provision for impairment increased by 12.0% to AED 1.3 billion, while the total provisions for impairment for the first half increased to 835.4 million. 

“The Group continues to record further improvement in year-on-year operating income and expense ratios. The marginal drop in net interest income was due to softening demand for SME loans and an increase in funding cost for the period which was not passed on to customers. With regard to strategy, our re-entry into wholesale business banking has opened the door for an opportunity in treasury business to work with our Wholesale Banking clients as well as Business Banking clients,” said Peter England, RAKBANK Chief Executive Officer. “Gross loans and advances increased by 5.5% year-on-year to AED 29.2 billion by the end of the first half of 2016 mainly in the Bank’s Wholesale Banking portfolio which grew by 148% to over AED 4 billion,” explained England.

Total assets grew by AED 345.0 million compared to 31 December 2015 to AED 40.9 billion mainly as a result of growth in gross loans and advances which were up by AED 683.4 million to AED 29.2 billion. Customer deposits grew by AED 183.8 million to AED 28.0 billion during the first half of 2016.

The Bank’s capital adequacy ratio as per Basel II requirement at the end of the second quarter is 24.1%, 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 this quarter, the regulatory liquid assets ratio was 18.3% and advances to stable resources ratio was 86.8%. Total equity totalled AED 7.5 billion including six months’ profit.

“Looking ahead, we expect provisions to settle down in the second half of the year as the trends we are currently seeing indicate that the worst is over for our Business banking portfolio. We will continue with our strategy of diversifying our loan book, and focus on product innovation while strengthening our branch and ATM network across the country and launching additional digital banking solutions,” said Peter England, RAKBANK Chief Executive Officer.

During the first half of this year, RAKBANK was the first bank in the UAE to receive the ISO 9001:2015 version certificate for its continuous commitment to quality management within the Branches and Inbound Contact Centre. The Bank was also recognized by the Asian Banker as Best Internet Banking Product of the Year Award in the Middle East 2016 for the web chat authentication initiative.

About RAKBANK
RAKBANK, also known as the National Bank of Ras Al Khaimah, is one of the UAE’s oldest and most dynamic financial institutions. Founded in 1976, it underwent a major transformation in 2001 as it rebranded into RAKBANK and shifted its focus from purely corporate to retail and small business banking. In addition to offering a wide range of retail banking services, the Bank increased its lending in the traditional SME, Commercial, and Corporate segment in recent years. The Bank also offers Islamic Banking solutions, via RAKBANK AMAL, throughout its 35 branches and its Telephone, Online, and Mobile Banking channels. RAKBANK is a public joint stock company headquartered in the emirate of Ras Al Khaimah and listed on the Abu Dhabi Securities Exchange (ADX). For more information, please visit www.rakbank.ae or contact the Call Centre on +9714 213 0000. Alternatively, you can connect with RAKBANK via twitter.com/rakbanklive and facebook.com/rakbank.

For media enquiries, please contact:
Geraldine Dagher
Geraldine@rakbank.ae