RAK Bank records decade-high profit surge of 53.4%

The profit growth “was supported by robust increases on both sides of the balance sheet,” the bank, according to the bank

Issac John

Published: Mon 13 Feb 2023, 6:45 PM

Last updated: Mon 13 Feb 2023, 7:39 PM

The National Bank of Ras Al Khaimah (RAK Bank) reported on Monday a net profit of Dh1.163 billion, a year-on-year growth of 53.4 per cent, which is the bank’s highest growth rate in over a decade.

The profit growth “was supported by robust increases on both sides of the balance sheet,” the bank said in a statement. Fourth quarter net profit of Dh284.6 million marked a 27.3 per cent YoY growth.

The total income of the bank surged 6.9 per cent to Dh3.452 billion with Q4 ’22 total income of Dh994.8M, up 25.5 per cent YoY, the bank said.

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The bank’s Board of Directors recommended the distribution of a cash dividend of 34 fils per share.

Mohamed Omran Alshamsi, chairman, RAK Bank, said the bank’s performance has entered a new and transformative era of growth.

Mohamed Omran Alshamsi, chairman, said the bank’s performance has entered a new and transformative era of growth.

“Following this strong recovery, we are now on track for sustained expansion underpinned by targeted investments and a sharp focus on fiscal and operational resilience.”

Raheel Ahmed, CEO of RAK Bank, said 2022 was a marquee year of recovery and growth with a 53.4 per cent YoY increase – achieving its highest annual growth rate in net profit since 2008.

“The growth was diversified across all of our segments and was accompanied by growths in total assets of 15.5 per cent, loans & advances of 7.6 per cent. It is also worth noting that customer deposits grew by 15.3 per cent YoY and CASA ratio was 70.4 per cent as of 31 December 2022 – an important achievement given the rising interest rate environment.

He said the bank has seen balance sheet momentum across Wholesale Banking and Business Banking segments that grew by Dh1.589 billion (18.3 per cent YoY) and Dh996 million (12.4 per cent YoY), respectively. Retail banking grew by Dh102.8 million (0.5 per cent YoY).

The bank’s total income was supported by a strong net interest income of Dh2.489 billion, up 14.8 per cent YoY with Q4’22 net interest income of Dh733 million, up 34 per cent YoY. Non-interest income was Dh962.5M, lower by 9.4 per cent, mainly due to lower trading profits in Q1’22. The non-interest income for Q4’22 was Dh261.6 million, up 6.7 per cent.

The bank noted that a well-diversified balance sheet and resilient UAE economic environment led to a 25.3 per cent reduction in impairments as against FY’21.

“The impairments for Q4’22 reflect an increase of Dh141 million against Q4’21 largely on account of prudent management overlays in anticipation of the expected developments in the fast-evolving regulatory landscape, uncertain global economy & rising interest rate environment.

Gross loans & advances at Dh38.1B billion, reflects a 7.6 per cent increase YoY on the back of a changing balance sheet mix in line with the strategic direction of the bank, the bank said.

Customer deposits stood at Dh44.9 billion, an increase of 15.3 per cent YoY.

— issacjohn@khlaeejtimes.com