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RAKBANK Records 13% Growth in First Quarter Profits

RAKBANK, the leading retail and small business bank in the UAE, reported a net profit of AED 367.98 million for the quarter ended 31st March 2013, reflecting a 13% growth over the same period last year.

“RAKBANK continues to register strong profit year on year owing to its conservative underwriting and a competitive pricing policy for its innovative products and award-winning customer service,” said Graham Honeybill, RAKBANK Chief Executive Officer. “The first quarter of 2013 saw major developments at the Bank including the launch of its Islamic banking division, RAKBANK AMAL, which caters to a wider customer base that prefers Shariah-compliant products.”

Net interest income plus net profit from Islamic financing grew by 6% compared to 31st March 2012 to AED 570.6 million. Non-interest income, which stood at AED 181.8 million by the end of the first quarter of 2013, climbed by 18% compared to the same period last year. This increase is due to several streams of fee income stemming particularly from auto loans, mortgages, Bancassurance, and foreign exchange services. In addition, investment income grew by 50% compared to same period last year as the Bank continued to invest in quoted debt instruments.

Operating costs on the other hand, despite increasing by 5.2% for the year, were well below total income growth of 8.6%, indicating an improving profitability. “In line with its strategy to add customer convenience and cap operating expenses, RAKBANK added new services on Mobile Banking during the first quarter of 2013 as it continues to expand its web-based solutions,” added Honeybill.

The total impairment charge for the quarter stood at AED 61.4 million compared to AED 60.5 million at the end of the same quarter last year. As always, the Bank was well provisioned towards loan losses with a conservatively adequate loan loss coverage ratio of 65% by the end of the first quarter of 2013.

Total assets as at 31st March 2013 were AED 28.3 billion, an increase of AED 1.1 billion over 31st December 2012, which primarily reflects the quarter's net profit and increase in deposits from banks. The Bank's advances to deposits ratio and liquidity ratio stands comfortably at 93.6% and 19.3% respectively.

The Bank's capital adequacy ratio as per Basel II requirement at the end of the quarter is 28.1% comprising entirely of Tier 1 capital. This is against a current minimum total capital ratio of 12% prescribed by the Central Bank in the UAE. Total shareholder's equity totaled AED 5.5 billion at the end of March.

Finally, during the quarter Moody's, Fitch and Capital Intelligence have affirmed their ratings of RAKBANK as follows:

Rating Agency Deposits Financial Strength Support
Moody's Baa1 / P-2  D+ -
Fitch  BBB+ / F2 C 2
Capital Intelligence A-/ A2 BBB+ 2

Posted by : Dubai PR Network Editorial Team
Viewed 8448 times
PR Category : Banking & Investments
Posted on : Thursday, April 25, 2013  9:31:00 AM UAE local time (GMT+4)
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