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Fundraising drive was launched to remove 1.1 million barrels of oil from the decaying tanker and transfer it to a replacement ship, which set sail from China in early April
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RakBank profit up 22% as provisions drop
There were lower payment defaults across all business segments at RakBank and higher recoveries in auto loans.
dubai - There were lower payment defaults across all business segments and higher recoveries in auto loans
Total assets stood at Dh48.5 billion, an increase of 14.2 per cent compared to December 31, 2016. Gross loans and advances closed at Dh33.2 billion, up by 11.6 per cent over the previous year. Total operating income decreased by 0.8 per cent due to the rebalancing of the loan portfolio, while operating expenses increased by Dh77.8 million, up 5.7 per cent over the previous year.
The provision for impairment on loans and advances decreased by Dh254.8 million compared to 2016, due to lower payment defaults in all business segments compared to 2016 and higher recoveries in auto loans. Total impairment provision for 2017 dropped to Dh1.55 billion compared to Dh1.8 billion in 2016.
The non-performing loan ratio declined to 4 per cent as at December 31, 2017, compared to 4.2 per cent at the end of 2016.
"The increase of Dh148 million in net profit is mainly due to a decrease of Dh255 million in the provision for impairment in loans. 2017 was a year where we continued with our diversification strategy, gradually reducing risk in the balance sheet. We continued to attract quality business relationships as evidenced by the growth in our customer deposits and loans and advances by 9.4 per cent and 11.6 per cent, respectively," said Peter England, CEO, RakBank.
Total operating income declined by Dh29.5 million to Dh3.8 billion, mainly due to a decrease of Dh101.9 million in net interest income and income from Islamic finance net of distribution to depositors compared to the previous year.
Non-interest income grew by Dh72.4 million to Dh1.1 billion. This was mainly due to increases of Dh62 million in fee and commission, Dh19.4 million in insurance underwriting profit and Dh24.1 million in foreign exchange and derivative income. This was offset by a decrease of Dh38.4 million in investment income compared to 2016.
Operating costs were up by Dh77.8 million, an increase of 5.7 per cent on 2016. This was mainly due to an increase of Dh42.9 million in staff costs and Dh36.7 million in legal and collection costs offset by a reduction in outsourcing costs of Dh14.8 million.
"In 2017, a particularly strong emphasis was placed on the growth of our treasury and wholesale banking divisions, while SME customers have remained a high priority for our business banking unit. These customers continue to be of immense importance to the UAE's economic growth and of special importance to RakBank, as one of the country's leading SME lender. Looking to 2018 and beyond, we will build on the successes that were achieved in 2017 to maintain growth across our principal business divisions, while at the same time adapting and expanding our product range to exceed the expectations of our customers."
The bank's directors recommended a cash dividend of 30 per cent.
- waheedabbas@khaleejtimes.com
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