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Rakbank 2011 profits jump 20pc

Dubai, January 22, 2012

Leading UAE bank Rakbank, also known as the National Bank of Ras Al-Khaimah, has posted a net profit of Dh1.203 billion ($327.6 million) for 2011, marking an increase of 20 per cent over 2010.

Earnings were impacted as a result of the Central Bank’s recently introduced guidelines on personal lending but the Bank swiftly refocused its business towards SME and other lending opportunities within the consumer banking segments, said the bank’s CEO Graham Honeybill.

“Rakbank’s very satisfactory results at a time of continuing difficult market conditions are a testament to the Bank’s consistent business strategy and robust performance” he added.

“Rakbank’s profitability is the result of the bank’s prudent policies and underwriting processes, and more importantly, the Bank’s successful foundation in excellent customer service delivery, which has helped by retaining and expanding our customer base.”

As a result of the business opportunities identified, net interest income increased by 23.4 per cent over 2010 to Dh1,984.5 million.

Total advances as at December 31, 2011 increased by 12 per cent over the previous year to reach Dh18.4 billion whilst total assets jumped by 14.6 per cent to close at Dh24.5 billion.

The growth in the asset book has been supported by a combination of increases in shareholders’ equity and customer deposits with total deposits growing by 11.73 per cent to close at Dh18.3 billion compared with Dh16.4 billion in 2010.

Commission was impacted by the new rules on retail lending but overall other income grew by 7.9 per cent to Dh652.9 million.

During 2011 Rakbank increased its Branch and ATM network and currently has 31 branches across the UAE with plans to open 3 more by the end of 2012.  The bank has 145 ATMs with a further 59 planned.

Overall credit losses rose by 11.6 per cent in 2011 to Dh301 million primarily as a result of a more conservative profile adopted towards the end of the year and on a much larger asset base.

The liquidity ratio for the year 2011 stood at 19 per cent at the year-end compared to 18.2  per cent at the end of 2010. The bank’s Tier 1 ratio as per Basel I at the end of the year was 17.2 per cent  against a current minimum of 12 per cent of Tier 1 capital as set by the Central Bank.

Rakbank will continue to focus on the delivery of quality products for its retail and small business customers allied with a high level of customer service quality.  “There are numerous good business opportunities in the market and Rakbank is well positioned to take advantage of them during 2012” concluded Honeybill.

The directors have recommended a stock dividend of 10 per cent and a cash dividend of 25 per cent.

The dividend recommended will result in over 71 per cent of the net profit being retained within the bank’s shareholders’ equity thereby increasing capital and reserves to strengthen the Bank’s overall position and provide support for future growth. – TradeArabia News Service




Tags: Dubai | profit | dividend | RAKBank | 2011 | Ras Al-Khaimah |

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