Rakbank earns Dh760m profit in H1 2013

For the half year ended 30th June 2013, the Rakbank has announced an Dh760.1m net profit, reflecting a 13.7 per cent increase over the same period last year.

"Rakbank's rise in profit in the first half of 2013 is a result of both funded and non-funded income streams, fuelled by a competitive pricing policy, innovative products, and industry-leading customer service," said Graham Honeybill, Rakbank Chief Executive Officer.

"The first half of the year witnessed major development at the bank, including the launch of its separate Islamic banking division, Rakbank AMAL, which offers a suite of Sharia-compliant products and services," he added.

Net interest income plus net profit from Islamic financing grew to Dh1.15 billion during the year, a 5.3 per cent increase compared to  June 30, 2012. Non-interest income reached Dh396.5 million for the first half of 2013, a jump of 24 per cent compared to the same period last year and boosting total operating income to Dh1.54 billion.

The 9.6 per cent growth in total operating income over the same period last year is due to a rise in loans and investments, as well as strong performances in non-funded income streams including loan origination fees, Bancassurance commission, fees from wealth management products, and commission fees from foreign exchange.

Operating costs increased by 6.4 per cent for the year, reflecting the increasing investment in information technology and other retail infrastructure.

"Rakbank added new mobile banking services during the first half of 2013 as the bank continues to add convenience to the customers' banking experience by expanding web-based solutions and prioritising customer service," said Honeybill.

Operating costs remained below the total operating income growth of 9.6 per cent.

The total impairment charge stood at Dh118.15 million for the half year compared to Dh114.65 million at the end of the same period last year. The bank was well provisioned against loan losses with a conservatively adequate loan loss coverage ratio of 63 per cent by the end of the first half of 2013. Non-performing loans made up only 2.3 per cent of the loan portfolio.

Total assets increased by Dh1.1 billion over  December 31, 2012 and stood at Dh28.4bn as at  June 30, 2013, reflecting the increase in the bank's investment portfolio which is entirely denominated in dirhams or US dollars. The bank's advances to deposits ratio and liquidity ratio stood comfortably at 92.3 per cent and 20.1 per cent respectively.

The bank's capital adequacy ratio as per Basel II requirement at the end of the quarter was 27.6 per cent comprising entirely of Tier 1 capital. As a conservative measure the bank does not take into account the June interim profits of Dh760.1 million in arriving at the above capital ratio. The current minimum total capital ratio as prescribed by the UAE Central Bank is 12 per cent.





 

Follow Emirates 24|7 on Google News.