DUBAI, (Pakistan Point News - 30th Jan, 2019) The National Bank of Ras Al-Khaimah, RAKBANK, has announced a consolidated net profit of AED917.5 million for fiscal year FY 2018, an increase of AED107 million over the previous year.
As at 31st December 2018, the bank’s total assets stood at AED52.7 billion, growing by 8.5 per cent compared to 2017. Gross loans and advances were AED34.8 billion, up 4.8 per cent on the previous year.
RAKBANK CEO, Peter England, commented, "This considerable increase in net profit was due mainly to an increase in the net interest income and net income from Islamic financing which grew by AED45.5 million and a decrease of AED 131.8 million in a provision for impairment in loans. The Total Operating Income increased by 0.4 percent, due to higher net interest income, while Operating Expenses increased by AED41.9 million, up by 2.9 percent compared to last year. 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. In short, the ‘quality’ of our earnings has improved continually over the last 2 years and we expect this trend to continue."
Total Operating Income increased by AED17.1 million to AED3.8 billion, mainly due to an increase of AED45.5 million in net interest income and income from Islamic financing, net of distribution to depositors. Non-interest income declined by AED28.3 million to AED1.1 billion. This was due to a year-on-year decrease of AED61.2 million in investment income. However, the decrease was offset by an increase of AED12.7 million for fee and commission income and an increase of AED24.0 million for foreign exchange and derivative income.
Operating costs increased by AED41.9 million, an increase of 2.9 percent in 2017. This was mainly due to an increase of AED7.0 million in staff costs and AED15.7 million in IT-related expenses. The group’s cost to revenue ratio increased marginally, to 38.9 percent compared to 38.0 percent in 2017. This is expected to taper down in the coming years as income grows and cost optimisation and digitalisation initiatives improve efficiency.
Total assets grew by 8.5 percent to AED52.7 billion, due to an increase of AED1.6 billion in Gross Loans and Advances, lending to banks, which grew by AED956 million, and an increase in investments of AED1.6 billion.
RAKBANK’s Chairman, Mohamed Omran Alshamsi, stated, "RAKBANK is placing greater emphasis on connecting new technologies with advanced processes that will deliver state-of-the-art services. In doing so, we aim to better serve our customers by offering a seamless experience across products and services, through industry-leading service excellence, innovation and simplicity."
