RakBank Q1 profit up 13pc, tops $100m
Ras Al Khaimah, April 24, 2013
RakBank, also known as the National Bank of Ras Al-Khaimah, reported a net profit of Dh367.98 million ($100.16 million) for the first quarter of the year, reflecting a 13 per cent growth over the same period last year.
“RakBank continues to register strong profit year on year owing to its conservative underwriting and a competitive pricing policy for its innovative products and award-winning customer service,” said Graham Honeybill, RakBank chief executive officer.
“The first quarter of 2013 saw major developments at the Bank including the launch of its Islamic banking division, RakBank AMAL, which caters to a wider customer base that prefers Shariah-compliant products.”
Net interest income plus net profit from Islamic financing grew by 6 per cent compared to March 31 to Dh570.6 million. Non-interest income, which stood at Dh181.8 million by the end of the first quarter of 2013, climbed by 18 per cent compared to the same period last year.
This increase is due to several streams of fee income stemming particularly from auto loans, mortgages, Bancassurance, and foreign exchange services. In addition, investment income grew by 50 per cent compared to same period last year as the Bank continued to invest in quoted debt instruments.
Operating costs on the other hand, despite increasing by 5.2 per cent for the year, were well below total income growth of 8.6 per cent, indicating an improving profitability.
“In line with its strategy to add customer convenience and cap operating expenses, RakBank added new services on Mobile Banking during the first quarter of 2013 as it continues to expand its web-based solutions,” added Honeybill.
The total impairment charge for the quarter stood at Dh61.4 million compared to Dh60.5 million at the end of the same quarter last year. As always, the Bank was well provisioned towards loan losses with a conservatively adequate loan loss coverage ratio of 65 per cent by the end of the first quarter of 2013.
Total assets as at March 31 were Dh28.3 billion, an increase of Dh1.1 billion over December 31, 2012, which primarily reflects the quarter’s net profit and increase in deposits from banks.
The bank’s advances to deposits ratio and liquidity ratio stands at 93.6 per cent and 19.3 per cent respectively.
The bank’s capital adequacy ratio as per Basel II requirement at the end of the quarter is 28.1 per cent comprising entirely of Tier 1 capital. This is against a current minimum total capital ratio of 12 per cent prescribed by the Central Bank in the UAE. Total shareholder’s equity totaled Dh5.5 billion at the end of March. – TradeArabia News Service
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