RAKBANK delivers the highest annual profit growth in over a decade with a Net Profit of AED 1,163.4M and a growth of 53.4% YoY

 The National Bank of Ras Al Khaimah (RAKBANK) today reported its financial results for the full year 2022 (FY’22) and the fourth quarter of 2022 (Q4’22)

Highest net profit growth rate in over a decade. A high single digit income growth supported by robust increases on both sides of the balance sheet.

•      FY’22 net profit of AED 1,163.4M, up 53.4% YoY. Q4’22 net profit of AED 284.6M, up 27.3% YoY.

•      FY’22 total income of AED 3,451.8M, up 6.9% YOY, with Q4’22 total income of AED 994.8M, up 25.5% YoY.

•      Total income for FY’22 was supported by a strong net interest income of AED 2,489.3M, up 14.8% YoY with Q4’22 net interest income of AED 733.1M, up 34.0% YoY.  The FY’22 non-interest income was AED 962.5M, lower by 9.4% YoY mainly due to lower trading profits in Q1’22. The non interest income for Q4’22 was AED 261.6M, up 6.7% YoY.

•      A well-diversified balance sheet and resilient UAE economic environment led to a 25.3% reduction in impairments as against FY’21. The impairments for Q4’22 reflect an increase of AED 141M 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 AED 38.1B, reflecting a 7.6% increase YoY on the back of a changing balance sheet mix in line with the strategic direction of the bank.

•      Customer deposits stood at AED 44.9B, an increase of 15.3% YoY.

Healthy returns whilst remaining well capitalized and having one of the best provision coverage ratios in the industry. 

•      The return metrics remained strong with ROA of 1.9% and ROE of 13.5% for FY’22 as against a 1.4% and 9.5% respectively for FY’21.

•      The Bank remained well capitalized with a Capital Adequacy Ratio (CAR) of 16.4%.

•      Net interest margins increased to 4.1% against 4.0% (FY’21) and continues to be among the highest in the Industry.

•      The Bank’s non-performing loans ratio improved to 3.0% against 4.0% for FY’21.

•      Impaired Loan provision coverage ratio increased to 181.7% against 133.7% last year, remaining one of the strongest in the industry.

Continued focus on maximizing shareholder returns       

•      The Board of Directors recommended distribution of a cash dividend of 34 fils per share for the shareholders’ consideration and approval at the Annual General Meeting (AGM).

H.E. Mohamed Omran Alshamsi, Chairman

Just as the UAE economy accelerated its post-COVID recovery in 2022, RAKBANK’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.

As a leading financial institution in the UAE, RAKBANK recognizes the important role we play in supporting the country’s vision and growth for the year 2050. We are committed to investing in technology and innovation to drive financial inclusion and create a more diverse and sustainable economy. We understand the importance of supporting the career growth and development of Emiratis and strive to provide them with empowering programs aimed to contribute to their personal growth and that of the UAE economy.

Looking ahead, we foresee 2023 to be a year of opportunity in the midst of uncertainty caused by geopolitical and economic headwinds. Therefore, we will diversify our business mix and further strengthen our credit profile and lay the foundation of a long term, sustainable growth.

Through the execution of our latest multi-year strategic plan, we will build on the Bank’s existing strengths, while continuing to transform the Bank to navigate through a challenging external environment, and ultimately exceed the expectations of our customers. 

By accelerating our digital transformation, we will continue to build digital journeys that enable fast, easy, personal, and relevant customer experiences. These outcomes are fundamental to the Bank’s continued success. 

Raheel Ahmed, CEO

RAKBANK delivered a net profit of AED 1,163.4 M, completing a marquee year of recovery and growth with a 53.4% 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%, loans & advances of 7.6%. It is also worth noting that customer deposits grew by 15.3% YoY and CASA ratio was 70.4% as at 31 December 2022 – an important achievement given the rising interest rate environment.

We have seen balance sheet momentum across Wholesale Banking and Business Banking segments that grew by AED 1,589.1M (18.3% YoY) and AED 996M (12.4% YoY) respectively. We also saw Retail Banking grow by AED 102.8M (0.5% YoY).

This stand out performance marks the year of reset.

A reset of performance: where we have achieved a V-shaped recovery by curbing the declines in the pandemic years. We re-ignited growth in both sides of the balance sheet, while prudently managing costs and strengthening our capital position to achieve an ROE of 13.5%.

A reset of strategy: where the Board, the management and employees across the Bank set out our vision to become the ‘digital bank with a human touch with our customers in their key moments of truth’, and defined the strategic programs to achieve that vision.

A reset of the way we work: working as one team, across departments front to back, towards a common goal with clear ownership and accountability.

With the successful completion of the reset phase, now it is time to deliver on the new strategy. We will continue to develop a sustainable business mix including growing the contribution of ‘lower risk’ segments such as Wholesale Banking, Commercial Banking and the Affluent Segment. We will change the way the Bank generates revenue by reducing our reliance on unsecured lending and increasing the proportion of fee and non-financing income as well as driving cross-sell across all segments. Finally, we will create a more scalable business by making investments to enhance our digital journeys and capabilities and improve efficiency in both customer acquisition and servicing.

As we work on these strategic deliverables, we continuously remind ourselves of our north star to stay ahead of the curve in customer experience. We understand that the hallmarks of a superior customer experience are hyper-personalization and relevance, achieved through harnessing the power of data and analytics. To this end, we at RAKBANK will continue to make strides in building trusted partnerships with our customers, as we believe this is ultimately the way we compete - and win.