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Rakbank Net Profit Surges 58 Per Cent

DUBAI - The National Bank of Ras Al-Khaimah or Rakbank on Sunday posted a full-year net profit of Dh635.98 million, representing an increase of 58 per cent over its 2007 results.

The bank, listed at Abu Dhabi Securities Exchange, posted a net profit of Dh401.39 million in 2007, according to its statement available at ADX website. The total revenue increased to Dh1.35 billion during the year from Dh902.94 million of 2007.

The bank currently rated stable by top rating agencies such as Moody’s and Fitch is one of the leading issuers of credit cards in the UAE and also has a strong presence in the retail mortgage market. According to the statement, the Rakbank board of directors recommended a stock dividend of 30 per cent and a cash dividend of 5 per cent for the year 2008. With these dividends the bank will retain 95 per cent of its net profit.

Throughout the year, Rakbank maintained a healthy and strong balance sheet where its assets grew by 27 per cent to reach Dh13.92 billion by the end of 2008 and equity increased by 32 per cent to reach Dh2.08 billion. The principal growth was seen in loans and advances. The Bank’s overall investment portfolio was Dh645 million as at the end of the year.

For the performance of the bank during 2008 the statement said, “Our performance in the first half of the year was good as we achieved strong sales in our key retail product lines. However, during the second half of the year the market was affected by severe liquidity problems, which resulted in sharply rising interest rates for customer dirham deposits. This shortage led to a reduced ability to source new business opportunities whilst interest rates depressed retail loan demand.”

Currently the bank has 25 branches across the Emirates and plans to open a further three during 2009. The Bank has restructured its corporate banking unit now styled BusinessBanking.

The bulk of the bank’s business is in the retail segment and positive growth was seen in retail loans, the SME segment, mortgages and in cards.

Complementing this growth in assets other income consisting of fees, commission, foreign exchange, investment and other operating income grew by approximately 37 per cent to Dh469.56 million.

The statement said, “We believe that Rakbank is well-placed to meet the challenges of 2009 and will continue to invest in products, services and technology to improve offering. Our Internet Banking platform has now been launched and we are encouraged by the positive feedback from customers.”

Central bank figures show that UAE banks lend Dh260 billion in first nine months of 2008, the highest ever recorded in recent history as it surpassed the credits of about Dh181 billion provided by the banks during all of 2007.

The bank still sees good lending opportunities and subject to liquidity considerations it will continue to lend in chosen markets particularly the SME segment which is a crucial component in the economic health of the country, disclosed the statement.

· abdulbasit@khaleejtimes.com