RakBank profit rises 13% on net interest income

dubai - Bank also saw a decrease of Dh131.8 million in provisions for impairment in loans

The National Bank of Ras Al-Khaimah (RakBank) on Wednesday said its 2018 net profit grew 13.2 per cent from Dh810.5 million in 2017 to Dh917.5 million in 2018, thanks to a surge in net interest income and income from Islamic financing and a decline in provisions.

"This considerable increase in profit was due mainly to an increase in net interest income and net income from Islamic financing - which grew by Dh45.5 million - and a decrease of Dh131.8 million in provisions for impairment in loans," said Peter England, CEO, RakBank.

"There are tangible results to show that the efforts we have made to de-risk certain parts of the business over the last few years have allowed us to reduce provisions and improve the quality of our loan book," England said.

Total assets grew by 8.5 per cent to Dh52.7 billion, due to an increase of Dh1.6 billion in gross loans and advances, lending to banks - which grew by Dh956 million - and an increase in investments of Dh1.6 billion.

Wholesale bank lending grew by 22.2 per cent, up Dh1.4 billion from the previous year. The personal banking loan portfolio was down by Dh346 million and business banking loan portfolio was up by Dh494 million compared to 2017. Customer deposits grew by 6.1 per cent to Dh34.1 billion, with growth derived mainly from an increase of Dh2.7 billion in time deposits.

"While 2018 presented hurdles, we maintained our diversification path, which is a core part of our 2020 Strategic Plan. RakBank is placing a greater emphasis on connecting new technologies with advanced processes that will deliver state-of-the-art services," said Mohamed Omran Alshamsi, chairman, RakBank.

Listed on the Abu Dhabi Securities Exchange, RakBank shares closed at Dh4.15 on Wednesday.

Total operating income increased by Dh17.1 million to Dh3.8 billion, mainly due to an increase of Dh45.5 million in net interest income and income from Islamic financing, net of distribution to depositors.

Non-interest income declined by Dh28.3 million to Dh1.1 billion. This was due to a year-on-year decrease of Dh61.2 million in investment income. However, the decrease was offset by an increase of Dh12.7 million for fee and commission income and an increase of Dh24.0 million for foreign exchange and derivative income.

- waheedabbas@khaleejtimes.com