The National Bank of Ras Al-Khaimah (RAKBANK) reported a record net profit of AED 129.27 million for the year ending 31 December 2004, an increase of 36% over the previous year’s profit of AED 95.1 million.
This year’s increase continues the Bank’s history of solid growth performance, being the fourth year in a row that profits grew in the region of 20-36%. Shareholders at the Annual General Meeting held on 2nd April 2005 approved a stock dividend of 20%. This prudent measure will allow the bank to ensure that future growth is supported by adequate shareholders funds. The meeting also decided to split the paid up of value of each share to AED 1 from AED 10 per share currently.
Income growth led the profit surge - net interest income increased by 38%, and non-interest fees, commissions, and foreign exchange sources increased by 59%, which reflects the Bank’s strategy to enhance its sources of fee based income by emphasising on its very high service quality standards.
Total assets as at 31 December 2004 were AED5.2 billion, a 39% increase from 31 December 2003 (AED3.7 billion). Significant growth in loans and advances to AED3.6 billion (an increase of 45%) was supported by the corresponding increase of customer deposits which closed at AED 4 billion (an increase of 38%).
The retail banking division continues to remain the main driver of the bank registering an all around growth in both customer advances and deposits. The bank has managed to significantly grow its customer base across its various products resulting in a profitable portfolio of Retail Loans, Credit Cards, Auto Loans, Mortgages and Investment services. A new branch in Khorfakkan was opened during the year taking the total number of branches to 15.
Bank continues to be seen as one of the leading retail banks in the UAE and is recognised as one of the top issuers of credit cards. Mastercard credit cards and Mortgage finance were launched in 2004 and remained hugely successful initiatives.
Shareholders’ Equity increased from AED 647.9 million to AED 798.3 million during 2004, a growth of 23%.
Continuing with the policy of strengthening the Bank’s balance sheet, prudent appropriations have been made to the bank’s Credit Risk reserve, Statutory reserve, General banking reserve and voluntary reserve required under the Bank’s Memorandum and Articles of Association.
During 2004, the Bank continued to invest in technology and Emiritisation efforts in order to meet challenges in the banking environment. During the year RAKBANK continued to hold its position as one of the most Emiratised banks in the United Arab Emirates, ending the year at a ratio of 41.1%.
Operating expenses of AED 185 million increased by 37% compared to 2003, reflecting the organic growth required to support the increased revenue generation.
The Bank’s liquidity position continues to be strong - the capital adequacy ratio at the year-end stood at 17%, against a minimum of 10% prescribed by the Central Bank.
