UAE-based National Bank of Ras Al-Khaimah (Rakbank) said it has registered a 16.6 per cent growth in its net profit for 2012 which rose to  Dh1.4 billion ($381 million) when compared to the same period the year before.

The leading retail and small business bank in the UAE continues to report double digit growth year on year by consistently pursuing its successful strategy towards the business and personal finance segments.

In review, the bank’s net interest income increased by 12.5 per cent to hit Dh2.23 billion over the same year a year ago. This was mainly a result of a 10.4 per cent growth in loans and advances, which stood at Dh20.3 billion for the year.

The fee income for 2012 exceeded 2011 levels despite the tariff restrictions imposed by the UAE Central Bank in May 2011, with total revenues climbing by 9.7 per cent to Dh2.9 billion.

The UAE lender pointed out that the credit losses were 30 per cent lower than 2011 as it continued to apply a conservative strategy to loan underwriting and provisioning.

Consequently, the non-performing loans remained steady, at a rate of 2.5 per cent of gross loans. The deposits grew by 13.3 per cent to Dh20.7 billion which, along with retained profits, was sufficient to support the growth in loans, investments and the repayment of the Dh684 million in debt to the Ministry of Finance, said the statement from the bank.

Rakbank said its operating costs increased by 13 per cent as it expanded the branch and ATM network throughout 2012 by adding a new unit in Sharjah, another in Abu Dhabi, and over 50 ATMs around the country.

Commenting on the results, CEO Graham Honeybill said, “2012 marks a very successful year for Rakbank. Not only did it see the bank’s implementation of its revamped core banking system, but also witnessed the preparations for the launch of its Islamic Banking window.”

"The bank also launched three dedicated SME banking centres to ensure a convenient banking presence where small and medium sized companies are located. Also the bank continued to invest in online media channels including Online Banking, Mobile Banking, and Rakbank Direct and Rakbank Deals on its website," he added.

Honeybill said impressed with the results, the bank's directors have recommended a stock dividend of 10 per cent and a cash dividend of 40 per cent to the shareholders.

"The dividend recommended will result in over 56 per cent of the net profit being retained, thereby increasing capital and reserves to strengthen the bank’s overall position and provide support for future growth," he added.

Besides its online innovations, the UAE lender said it is committed to taking advantage of opportunities in the marketplace that grow its customer base.

The bank, he said, recently introduced Islamic Banking services through a separate brand, Rakbank Amal, to take advantage of the growing local demand for Islamic finance.

“Rakbank is aligning itself with the country’s efforts to be at the forefront of Islamic Finance by bringing its trendsetting products, online solutions, and award-winning customer service into the local Islamic banking market,” he stated.

On its future outlook, Honeybill said, "Rakbank is well positioned to comply with the new liquidity rules as and when they become effective. The Bank’s Tier 1 ratio as per Basel II is 28.78 per cent as against the requirement of 12 per cent set by the UAE Central bank and this level of capital provides the Bank ample room for growth during 2013."

"The regulatory liquidity ratio at year end was 20 per cent compared to 19 per cent by end of 2011," he stated.-TradeArabia News Service