Rakbank’s profit grows 13% in Q1

Rakbank reported net profit of Dh367.98 million for the quarter ended March 31, 2013, showing 13 per cent growth over the same period last year.
 
Net interest income plus net profit from Islamic financing grew six per cent compared to March 31, 2012 to Dh570.6 million. Non-interest income, which stood at Dh181.8 million by the end of the first quarter of 2013, climbed by 18 per cent compared to the same period last year. This increase is due to several streams of fee income stemming particularly from auto loans, mortgages, bancassurance and foreign exchange services.

Investment income grew by 50 per cent compared to same period last year as the bank continued to invest in quoted debt instruments.
 
Operating costs on the other hand, despite increasing by 5.2 per cent for the year, were well below total income growth of 8.6 per cent, indicating improving profitability.
 
The total impairment charge for the quarter stood at Dh61.4 million compared to Dh60.5 million at the end of the same quarter last year. The bank was well provisioned towards loan losses with a conservatively adequate loan loss coverage ratio of 65 per cent by the end of the first quarter of 2013.

Total assets as at  March 31, 2013 were Dh28.3 billion, an increase of Dh1.1 billion over  December 31,2012, which primarily reflects the quarter's net profit and increase in deposits from banks. The bank's advances to deposits ratio and liquidity ratio stands comfortably at 93.6 per cent and 19.3 per cent respectively.
 
The bank's capital adequacy ratio as per Basel II requirement at the end of the quarter is 28.1 per cent comprising entirely of Tier 1 capital. This is against a current minimum total capital ratio of 12 per cent prescribed by the Central Bank in the UAE. Total shareholder's equity totalled Dh 5.5 billion at the end of March.
 

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