RAKBANK Group Reports AED 606.3 million in Net Profit for the nine months ended September 30, 2017
The National Bank of Ras Al Khaimah (RAKBANK) Group achieved a 9.4 per cent growth in the consolidated net profit of AED 606.3 million for the nine months ended 30 September 2017.
The third quarter of 2017 generated a profit of AED 224.8 million, which is a significant increase of 106.7 per cent year on year. Gross Loans and Advances stood at AED 32.6 billion as of 30 September 2017, up by 12.5 per cent compared with the same period last year. The steady growth of the Gross Loans & Advances led to an increase of Total Assets by 8.3 per cent to AED 46.1 billion compared to the end of 2016. Additionally, Customer Deposits grew by AED 2.1 billion to AED 31.5 billion, a 7.0 per cent growth compared to the end of 2016.
“RAKBANK’s performance these past nine months is a reflection of the Bank’s diversification strategy that was initiated a few years ago. All the various business segments of Wholesale Banking, Business Banking, Personal Banking, and Treasury have made solid progress throughout the year. Whilst diversifying our loan book and growing into new areas in Treasury and Wholesale banking particularly, the bank remains very committed to the SME segment despite the challenges faced in this area in the past 2 years,” RAKBANK CEO, Peter England, said.
Total Income increased by 1.2 per cent for the third quarter of 2017 compared to the same quarter of the previous year. The Group’s Wholesale Banking, Business Banking and Insurance businesses brought about strong growth in the non-interest income despite the net interest income for nine months declining due to the changes made in the Bank’s business mix of lending. Operating expenses increased by 6.6 per cent year-on-year as a result of investments in new lines of business as well as continue strengthening of Compliance and Risk, and the cost associated with improvements in debt recovery. As a result of these investments the cost to income ratio for the period increased marginally to 37.7 per cent. Impairments continued their downward trajectory from its peak in the third quarter of 2016, declining by 27.8 per cent in the third quarter of 2017 compared with the third quarter of previous year and is down by 12.0 per cent in the nine months compared to the same period in 2016.
“With several strategic partnerships signed this past quarter, the Bank continues to pursue new initiatives that to support its chosen market segments. One example is the signing of an agreement with a FinTech Supply Chain Finance platform, Invoice Bazaar, to further digitise our offerings and open up a new channel in SME lending. In addition, we signed a Memorandum of Understanding (MoU) for Managed Point of Sale Services with Etisalat, a first-of-its-kind approach in the UAE payments and banking industry which will help us deliver a superior Merchant Acquiring platform particularly for our SME client base. The Bank will continue to invest in product, service, and technology enhancements to ensure that we are providing a full range of products and services to our valued customers,” said England.
The Bank’s capital adequacy ratio as per UAE Central Bank regulations stood at 20.4 per cent as of the end of September 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 September 2017 is 14.1 per cent compared to 16.9 per cent at the end of 2016. The advances to stable resources ratio stood comfortably at 88.8 per cent compared to 85.5 per cent at the end of 2016.