The National Bank of Ras Al Khaimah (RakBank) has posted a consolidated net profit of Dh431.7 million ($117.5 million) for the first half (H1) of the year, reflecting an increase 13.2 per cent year-on-year and 10.5 per cent compared with the first quarter of 2018.

The second quarter of 2018 generated a net profit of Dh226.6 million, which was similar to the net profit achieved for same quarter last year.

Gross Loans & Advances grew by 5.9 per cent to Dh35.2 billion for the half year ended June 30 with strong growth in Wholesale Banking book.

Peter England, RakBank CEO said: “Our financial performance in the first half of 2018 reflects the ongoing shift of business strategy to a more diversified balance sheet. In line with this shift, provisions have continued to come off gradually in the last seven quarters after peaking in the third quarter of 2016.

“Gross interest income has grown strongly, though funding cost has increased more than expected as a result of increased competition for deposits in the market. Regardless, RakBank continues to maintain one of the lowest funding costs in the market due to our very strong SME franchise.”

Total Assets increased by 5.2 per cent to Dh51.1 billion compared to the end of 2017. This was due to an increase in Gross Loans and Advances of Dh2.0 billion and an increase in Investments of Dh1.5 billion.

The healthy growth of corporate loans from Wholesale Banking segment contributed to the increase of the Gross Loans and Advances by 11.3 per cent year-on-year. Likewise, Customer deposits grew by Dh1.6 billion to Dh33.8 billion, a 5.0 per cent growth compared to the end of 2017.

“We continue to be very focused on bringing innovation to the market. We recently announced the Bank’s partnership with FC Barcelona to become their regional partner and official bank in the UAE, aiming to introduce new FC Barcelona co-branded Mastercard Platinum Credit and Debit Cards,” England added.

“In addition, the Bank signed strategic agreements with both RAK SME and Dubai SME to continue supporting this vital sector in the UAE economy. We also partnered up with Air Arabia to launch a co-branded Mastercard Platinum Credit Card, which offers Air Rewards and provides customers great value in the air and on the ground. Similarly, the Bank recently introduced a dedicated app for its Business Banking customers to offer them a seamless access to Trade Finance services in just one click.”

Total income was Dh1.9 billion for the six months ended 30 June 2018, which increased by 1.9 per cent for the second quarter of 2018 over the first quarter, though declined by 2.7 per cent over the comparable period in 2017, largely due to the challenging bond market. Net Interest Income and Income from Islamic finance for the first half of 2018 was Dh1.4 billion, which grew by 1.6 per cent over same period last year.

Operating expenses were up by 3.7 per cent year-on-year and cost to income ratio stands at 39.9 per cent, though this is expected to moderate down in the second half. Impairments continued their downward trajectory declining by 10.9 per cent in the second quarter of 2018 over the previous quarter. Impairments during the six months ended 30 June 2018 were down by 15.6 per cent from the comparable period in 2017.

The Bank’s capital adequacy ratio as per UAE Central Bank regulations stood at 18.2 per cent at the end of June 2018. This level of capital provides the Bank with ample room for growth in 2018, said a bank statement.

The regulatory eligible liquid asset ratio at the end of June 2018 was 13.2 per cent compared to 15.0 per cent at the end of 2017. The advances to stable resources ratio stood comfortably at 91.5 per cent compared to 87.8 per cent at the end of 2017.

“Looking ahead, RakBank’s new three-year strategy will focus on building the performance of improved business units and continuing to innovate through the introduction of a more diverse range of products, services, and initiatives,” concluded England. – TradeArabia News Service