Rakbank reports record growth in profits to Dhs401.38m

This was assisted by increase in net interest income which at Dhs 559.77 m was up 47% while other income consisting of fees, commission and foreign exchange income which at Dhs 343 m grew by approximately 24%. This is in line with the bank's efforts to increase non-interest revenue.

Retail Banking remains the key driver of the Bank and 2007 was another successful year with an increase in the customer base across all the products offered including retail loans, credit cards, mortgages, investment services and small business lending. The Bank is one of the leading commercial providers of mortgages in Dubai and this is an area where we see considerable potential in the future. The Bank has increased its network of branches to 20 and there are plans to open 5 more branches in 2008.

Whilst the restructuring of Corporate Banking with a renewed focus of mid-market customer segment is beginning to show results, the performance of the division was also aided by some one off recovery during the year.

Total assets as at 31 December 2007 were Dhs10.97bn, a 24% increase from 2006 resulting from a growth in loans and advances to Dhs8.17bn. The bank's investment portfolio at Dhs626m grew by 26% and the diversification has resulted in significant improvement in the yield from these assets.

The growth in the asset book has been supported by a combination of increases in customer deposits, medium term bank borrowings and an increase in shareholders' equity. Customer deposits increased by Dhs1.38bn during the year 2007 through a healthy combination of increases in transaction accounts and fixed term deposits.

Following the successful launch of the bank's inaugural Euro Medium Term Notes (EMTN) program in 2005, a further $100m was issued in the last quarter of 2007.

The bank's capital adequacy ratio at the end of the year closed at 13%, against a minimum of 10 % prescribed by the UAE Central Bank. The ratio will further improve to over 16% after appropriations of profits for 2007.

Rakbank has again remained in the forefront of Emiratisation maintaining a national ratio in its work force of 41.58% in 2007. The bank's continued emphasis on quality service to its customers ensured that it maintained its leadership position in the category of best bank for service quality in the UAE.

Dividend

The Directors have recommended a stock dividend of 20% and a cash dividend of 10%. This proposal is in line with the bank's strategy to reward its shareholders while at the same time ensuring a robust internal generation of equity in support of future business expansion.