RAKBank’s 2020 profits plunge 54%, hit by Covid-19, economy

The National Bank of Ras Al Khaimah (RAKBank) posted net profit of Dh505.4 million for 2020, decreasing by Dh589.9 million, or 54 per cent, over the previous year due to impact of the pandemic on customers and the economy.

Total assets stood at Dh52.8 billion, decreasing by 7.6 per cent over 2019, and gross loans and advances closed at Dh32.2 billion, down by 11.2 per cent over the previous year.

The bank’s customer deposits grew by Dh118 million to Dh36.9 billion compared to 2019 while operating expenses decreased by Dh175.1 million, down by 11.1 per cent compared to the previous year.

Total income for the financial year ended December 31, 2020 amounted to Dh3.6 billion, decreasing by 10.4 per cent. Net interest income and net income from Islamic finance stood at Dh2.5 billion for the year 2020, decreasing by 9.9 per cent year-on-year. Non-interest income decreased by Dh138.4 million year-on-year to Dh1 billion, mainly due to a decrease of Dh139.9 million in net fees and commission income.

The bank’s board of directors recommended distributing cash dividend of 15 per cent of the share capital, or 15 fils per share.

Mohamed Omran Alshamsi, chairman of RAKBank, said: “We have been very focused on doing what we can, which is to continue running our business in the best way possible, responding and supporting our customers.”

He said economic activity in the UAE is in a gradual recovery phase as businesses return to normalcy especially the business segments catered to by RAK Bank.

“The bank remains cautiously optimistic about 2021 and will continue to stay vigilant,” he said.

“Overall, we came into this period in a very strong position so the Bank has been able to continue to operate very effectively without interruption, but of course we have been impacted. As the pandemic unfolded, many of our SME customers were severely affected – and numerous Personal Banking clients faced salary cuts and other challenges. With the support of the country’s regulators, we were able to help our customers through deferrals on repayments and loan restructuring where required and reduced or eliminated a number of charges for clients,” said RAKBank CEO, Peter England.

— waheedabbas@khaleejtimes.com