The National Bank of Ras Al Khaimah (Rakbank) has reported solid growth for the first quarter of the year with more than two-fold increase in its net profit which surged to hit AED450 million ($123 million), while its total income soared to AED1.07 billion ($292 million). 

 

Announcing the financial results for the three-month period ended March 31, 2023, Rakbank said its net profit surged by 105% mainly driven by a robust and diversified growth on both sides of the balance sheet. This was underpinned by strong sales momentum and lower cost of funds.

 

Total income performance was supported by a strong net interest income of AED788.8 million, up 46% YoY. Net interest margins increased to 4.9% against 3.8% (Q1’22) and continues to be among the highest in the industry, it stated. 

 

The non-interest income for the first quarter hit AED284.4 million, up 52.5% YoY. The growth in non-interest income was driven by higher forex and derivative income. 

 

Gross loans and advances at AED38.7 billion, reflecting a 1.4% increase compared to December 31, 2022 on the back of a changing balance sheet mix in line with the strategic direction of the bank.

 

Customer deposits stood at AED46.4 billion, up 3.3% compared to the previous quarter ened December 31, 2022. The bank has a strong current and saving account (CASA) franchise with the CASA ratio of 70.5%. 

 

Cost of Risk remained low due to the Bank’s diverse business mix and resilient UAE economic environment, leading to a 30.9% reduction in impairments as against Q4’22. Impaired Loan provision coverage ratio increased to 192.1% against 137.8% in Q1’22, remaining one of the strongest in the industry.

 

On its solid performance, CEO Raheel Ahmed said: "Delivering on our multi-year strategy, we accelerated our growth and achieved a record net profit of AED450 million and a record total income of AED1.07 billion for the quarter. In addition to this impressive growth, I am very pleased with the progress we are making in laying the foundation for sustainable growth."

 

"In diversifying our income sources, we achieved robust growth on both sides of the balance sheet, across interest and fee incomes, and in all our segments. In terms of building deeper customer relationships, we achieved strong growth in digitally active customers with digital transactions growing by 12% YoY," he stated. 

 

Being one of the largest SME banks in the UAE, Ahmed said Rakbank continues to back entrepreneurs and start-ups by opening more than 4,000 business accounts in Q1 2023, of which 1,600 accounts were opened for start-ups. 

 

"Similarly, we disbursed AED571 million in business loans, out of which AED394 million were disbursed for new business loan customers," he added.-TradeArabia News Service