RakBank net profit up 13.5%

The National Bank of Ras Al Khaimah (RAKBANK) has reported a net profit of Dh668.7 million for the half year ended  June 30, 2012, reflecting a 13.5 per cent growth compared to same period of 2011.

Net interest income grew 17 per cent over 2011 to Dh1.1 billion.

Gross loans and advances stood at Dh19.9 billion, an increase of 6.4 per cent over  December 31, 2011 and an increase of 11.5 per cent compared to June 30, 2011.

The total impairment charge for the six months is Dh114.6 million.

Non-interest income at Dh320.1 million was down by 13 per cent compared to June 30, 2011. This is primarily because of the impact of regulatory restrictions imposed since May 2011 on fees and charges. However, the bank’s fee income grew 7.4 per cent compared to the previous quarter.

Loans and advances grew by Dh1.18 billion during this half year. Deposits, on the other hand, have grown by Dh1.99 billion. The bank's advances to deposits ratio and liquidity ratio stands at 92.4 per cent and 20.3 per cent respectively.

Over Dh640 million of new investments were made in various debt instruments during the current half year. The investment book, as a result grew by Dh423 million, net of maturing instruments.

In the annual general meeting held in April the shareholders decided to retain 70 per cent of 2011 profits. This enabled the bank to boost its capital base by Dh787 million and as a result an amount of Dh300 million of the subordinated debt, categorised as Tier 2 capital, was repaid to Ministry of Finance after obtaining the necessary regulatory approvals. In the same meeting the shareholders decided to allocate Dh240 million to a non-distributable regulatory credit risk reserve.

Total shareholder's equity stood at Dh4.96 billion at end of June after distribution of cash dividend of Dh415.6 million for the year 2011. The bank's Tier 1 and total ratio stands at 20 per cent and 21.8 per cent respectively. The interim profit of Dh668 million has not been considered in arriving at these ratios.

The bank’s ratings have remained unchanged since December 2011: Rating Agency Deposits Financial Strength Outlook Support Moody's Baa1 / P-2 D+ Stable - Fitch BBB+ / F2 C Stable 2 Capital Intelligence A-/ A2 BBB+ Stable 2.

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