RakBank, the national bank of Ras Al-Khaimah, has posted a Dh160.37 million (43.6 million) net profit for the first quarter of 2009, up 12.7 per cent when compared to the same period last year.

Announcing the results, Graham Honeybill, Rakbank general manager, said the bank’s performance during the quarter which ended March 31, 2009, remained positive despite adverse market conditions, with the Personal Banking portfolio continuing to grow in line with the bank’s targeted expansion.

According to him, the bank’s net interest income increased by 34 per cent from the same period last year to reach Dh248 million.

The gross loans and advances stood at Dh11.9 billion, a 5 per cent increase over end of 2008 and a 30 per cent increase over the first quarter last year.

The fee, commission and other income at Dh118 million was marginally up compared to the same period last year, he noted.

“RakBank has continued to actively seek new lending opportunities and has seen growth in a number of segments, including those of small businesses, personal loans, mortgages and credit cards,” said Honeybill.

“Despite interbank rates easing, the cost of customer deposits has remained high, and this has impacted the level of profitability this year, compared to what the bank has seen in previous years,” he explained.

“Nevertheless, and in spite of the market’s challenging conditions, RakBank’s business has registered very healthy growth in the first quarter across its product offering,” he said.

Honeybill stated that the bank will continue to focus on providing its customers with a full range of products complemented by excellent customer service, and that it would continue to invest in technology and other delivery channels.

'The bank remains at the forefront of Emiratisation in the banking industry. Its capital adequacy ratio at the end of the quarter stood at 16.45 per cent, against a minimum of 10 per cent as prescribed by the UAE Central Bank,' he added.

The total assets at the end of the quarter were Dh14.5 billion, a 4 per cent increase from the end of 2008 and a 23 per cent increase compared to end of the first quarter last year. The growth in assets was mainly due to a rise of Dh600 million in loans and advances.

RakBank’s investment portfolio was at Dh520 million at the end of the quarter against Dh645 million at the end of last year, the decline being due to maturity of investments.

The bank has said that it intends to hold all investments to maturity with no loss expected on any of its investments. The bank has no direct or indirect exposure to any Sub-prime or similarly structured product, Honeybill said.

The growth in the asset book has been supported by a combination of increases in customer deposits and shareholders’ equity.

Customer deposits were at Dh10.56 billion and up by Dh903 million from December 31, 2008 due to a combination of term and transaction deposits.

During the quarter, $100 million tranche of the medium term notes programme matured. The share capital of the bank increased to Dh962 million from Dh740 million after distribution of a 30 per cent stock dividend.  Total shareholder’s equity increased to Dh2.21 billion, Honeybill added.-TradeArabia News Service