RAKBANK Group reports AED 154.7 million in profits for the first quarter
The National Bank of Ras Al Khaimah (RAKBANK) Group has announced its financial results for the first three months ended 31 March 2017.
RAKBANK’s consolidated net profit was recorded at AED 154.7 million, an increase of AED 46.0 million over the last quarter of 2016. Gross Loans & Advances were up 2.2 per cent from December 2016 to AED 30.4 billion on the back of strong growth in the Wholesale banking book.
Commenting on the financial results, RAKBANK CEO, Peter England, said, “The trends for the first quarter 2017 are showing positive signs. We had a very strong quarter on fee income as our efforts in building the Wholesale Banking and Treasury franchise are really beginning to bear fruit. Our year on year net Interest Income has been affected by our change of business mix, however the efforts in this area put us in a much better position for net earnings growth over the coming quarters. After peaking in the third quarter of 2016 provisions have continued to come off in the last two quarters and our forward looking indicators give us comfort that this trend should continue during the course of 2017”.
Total income grew 2.6 per cent compared to the last quarter of 2016, though declined 4.4 per cent over the comparable period in 2016. Net interest income declined as the Bank continued to change its business mix of lending, though this was offset to an extent by strong fee income growth particularly from the Bank’s Treasury and Wholesale banking activities. Operating expenses were marginally up year on year, though were marginally down in comparison to the fourth quarter of 2016 as the Bank continued its focus on cost optimisation. Impairments continued their downward trajectory from the peak in Q3 2016, declining by 4.3 per cent from Q4 2016 though were up 10.7 per cent from the comparable quarter in 2016.
England added, “Other than the financial performance, the Bank has had tremendous success in a number of key areas. Our new digital banking platform launched in late 2016 has been very well received by our clients who can now enjoy the convenience of a single digital platform across all of their devices. We have seen significant improvement across the board in all our service quality indicators which has been acknowledged by receiving a number of highly recognised industry awards. During the first quarter we also signed agreements with both RAK SME and Dubai SME to work together to continue to support this crucial sector in the UAE economy. As the largest SME bank in the UAE, we remain firmly committed to helping small businesses grow and develop despite challenging conditions in the past 24 months. On the product side we continue to see exceptional traction on our recent product innovations such as our ‘Home in One’ Product which remains to be the only product of its type in UAE market, as well as our recently launched Fawrun deposit product from RAKislamic which has been extremely well received by our clients. 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.”
Total assets rose by 0.8 per cent to AED 42.9 billion compared to the end of 2016. This was due to an increase in Gross Loans and Advances of AED 647.9 million partially offset by decrease in investments of AED 123.0 million and a decrease in lending to banks by AED 112.6 million. Gross Loans and Advances grew by 5.7 per cent year-on-year on the back of a healthy growth in Corporate Loans. Customer deposits grew by 1.3 per cent to AED 29.8 billion compared to the end of 2016. This growth came mainly from an increase of AED 640.6 million in demand deposits partially offset by a decrease of AED 247.4 million in time deposits.
The Bank’s capital adequacy ratio as per UAE Central Bank regulations stood at 22.2 per cent at the end of the first quarter of 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 the quarter was 15.5 per cent compared to 16.9 per cent at the end of 2016. The advances to stable resources ratio stood comfortably at 86.7 per cent compared to 85.5 per cent at the end of 2016.