RAKBank Group Posts Dh381.5m Net Profit for First Half

The RAKBank Group announced on Monday a consolidated net profit of Dh381.5 million for the half year ended June 30.

The second quarter of 2017 generated a profit of Dh226.7 million, an increase of 16 per cent year on year and a 46.5 per cent increase compared with the first quarter net profit. Gross loans and advances grew by 6.2 percent to Dh31.6 billion in the half year with strong growth in wholesale banking book and steady growth in the personal banking and business banking segments.

Commenting on the financial results, RAKBank CEO Peter England said: "The trends for the first half of 2017 are showing continued positive signs where solid progress is made by all business units being wholesale banking, business banking, personal banking and treasury. Total income for the second quarter of 2017 increased by 2.1 per cent over the previous quarter and impairments continue on a downward trend after peaking in Q3 2016. Impairments are still relatively high reflecting the nature of our legacy book, however we expect continued improvements in this area as the year progresses."

"Total assets increased by 3.4 per cent to Dh44.0 billion compared to the end of 2016. This was due to an increase in gross loans and advances of Dh1.8 billion partially offset by a decrease in investments of Dh497.6 million. The healthy growth of corporate loans from wholesale banking and the steady progress of loans from the business banking and personal banking segments contributed to the increase of the gross loans and advances by 8.2 per cent year-on-year. Likewise, customer deposits grew by Dh1.2 billion to Dh30.6 billion, a 3.9 per cent growth compared to the end of 2016."

Total income was Dh1.9 billion for the six months, which increased by 2.1 per cent for the second quarter over the previous quarter, though declined by 2.8 per cent over the comparable period in 2016. The group's treasury, wholesale banking and insurance business brought about strong growth in the non-interest income though the net interest income declined due to the changes made in the bank's business mix of lending.

Operating expenses were marginally up year-on-year after the cost optimisation exercise in the first half of 2016 and the cost to income ratio stands at 37.4per cent. Impairments continued their downward trajectory from the peak in the third quarter of 2016, declining by 14.9 per cent in the second quarter of 2017 over the previous quarter. Impairments during the six months ended 30 June 2017 were down by 2.4 per cent from the comparable period in 2016. 

The bank's capital adequacy ratio as per UAE Central Bank regulations stood at 21.1 per cent at the end of June 2017. This level of capital provides the bank with ample room for growth in 2017. The regulatory eligible liquid asset ratio at the end of June 2017 was 14.9 per cent compared to 16.9 per cent at the end of 2016. The advances to stable resources ratio stood comfortably at 90.9 per cent compared to 85.5 per cent at the end of 2016.

Source: Khaleej Time