5.45 PM Thursday, 28 March 2024
  • City Fajr Shuruq Duhr Asr Magrib Isha
  • Dubai 04:57 06:11 12:27 15:53 18:37 19:51
28 March 2024

RAK Bank profit drops 9%

Published
By Staff

RAK Bank net profit dropped Dh33 million to Dh334.6 million for the quarter ended on March 31, 2014, compared to the same period last year, a fall of nearly nine per cent.
 
Total assets stood at Dh31.5 billion, growing 11.3 per cent year-on-year. Asset growth year-to-date has been 4.6 per cent which is attributed to a rise in the investments portfolio of Dh862 million and gross loans and advances by Dh680 million.
 
Gross loans and advances stood at Dh23 billion, up 12.3 per cent year-on-year. Gross Islamic financing assets increased by Dh465 million compared to 31 December 2013. Customer deposits grew by Dh447 million to Dh23.5 billion compared to 31 December 2013. The growth was mainly in Sharia compliant deposits which grew by Dh342 million.
 
Net interest income plus net profit from Islamic financing grew 7.4 per cent to Dh639.2 million compared to March 31, 2013 mainly due to a reduction in the cost of deposits as the Bank focused on accumulating low cost transaction accounts and Income from Islamic financing which increased by Dh22.2 million to Dh22.8 million in line with its growing Islamic finance portfolio that commenced operations in 2013.
 
Total operating income increased Dh72.3 million to Dh824.7 million, an increase of 10 per cent compared to 31st March 2013. This growth was mainly due to an increase of Dh44.3 million in net interest income and income from Islamic financing and Dh28.0 million in non-interest income, which went up by 17.8 per cent from the same period last year.
 
Operating costs increased 11 per cent to Dh359.8 million compared to the same period last year mainly due to increases in employment costs.
 
The total impairment charge for the quarter stood at Dh130.3 million compared to Dh61.4 million at the end of the same quarter last year.
 
Non-performing loans were steady at 2.4 per cent of the loan portfolio and the annualized net credit losses to average loans and advances closed at 2.3 per cent.
 
"Our first quarter performance is in line with the message we have been sending to markets," said Peter England, RAK Bank Chief Executive Officer.
 
"The focus for 2014 is to strongly grow the Bank's top line to help buffer a level of net credit losses which is more representative of the on-going position for a loan book like ours after 2 years of abnormally low credit losses. We expect to see solid increases in top line performance over the next 3 quarters as the full impact of our loan pipeline starts to come through," said England.
 
The Bank's capital adequacy ratio as per Basel II requirement at the end of the quarter is 27.6 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. At the end of the quarter, the regulatory liquid assets ratio was 18.9 per cent and advances to stable resources ratio was 91 per cent. Shareholder's equity totalled Dh6 billion including current quarter profit.