RAK Bank posts 42.2 per cent rise in Q1 net profit

The National Bank of Ras Al Khaimah (RAK Bank) yesterday said its net profit in the first quarter jumped 42.2 per cent to Dh228 million from Dh160.4m in the year earlier period.

Net interest income in Q1 2010 rose 48 per cent to Dh372.8m compared to Q1 last year as the bank continued to follow a measured approach to expansion, with a focus on maintaining a consistent and sustainable level of growth through a careful lending policy and actively seeks new lending in its chosen fields and has seen growth in the small business and personal finance segments.

Gross loans and advances stood at Dh14.8bn an increase of 6.5 per cent over December 31, 2009 and an increase of 25 per cent compared to March 31, 2009.

Total impairment charge for Q1 increased to Dh81.3m from Dh54.3m to the same period last year.

Graham Honeybill, General Manager, said: "Although economic recovery is subdued, there remain good lending opportunities."

The bank has continued its focus on products that are core to its business model, namely SME, small business financing, mortgages, personal lending and cards, and the success of our marketing efforts are reflected in the first quarter's results.

Fee, commission and other income reached Dh152m, up by 34 per cent over Q1 2009.

Total assets were Dh18.22bn, an increase of 6.5 per cent over December 31, 2009. The main growth in assets was seen in loans and advances.

During the quarter investments totalled Dh56.3m matured or were disposed of leaving an outstanding portfolio of Dh352m at the end of March. The bank intends holding all investments to maturity and does not anticipate any loss on any of its investments, all of which are in the name of domestic institutions.

The growth in the asset book has been supported by a combination of increases in customer deposits and shareholders' equity. Customer deposits were up by Dh1.2bn from December 31 2009 from a combination of term and transaction deposits.

The bank's advances to deposits ratio comfortably stood at 91.6 per cent as per the Central Bank of UAE guidelines. The bank purchased $53.5m of its own bonds from the market due to favourable liquidity conditions. The share capital increased to Dh1.154bn from Dh962.03m after distribution of a 20 per cent stock dividend.