Rakbank records Dhs1.04bn in profit for first nine months of 2012
- United Arab Emirates: Sunday, October 21 - 2012 at 15:22
- PRESS RELEASE
Rakbank, one of the leading retail and small business banks in the UAE, reported a net profit of Dhs1.04bn for the nine months ended 30th September 2012, recording 14.5% annual growth compared to the same period in 2011 and 7.6% quarter growth.
Net interest income for the nine months increased by 14% to Dhs1.7bn compared to the same period last year, and net loans and advances grew by 9.36%. With deposits up by 12.5% at Dhs2.29bn, the Bank was able to maintain healthy liquidity and loan to deposit ratios at 19.4% and 91.9% respectively.
"The positive results reported for the nine months reflect the continued growth in our customer base as a direct result of the Bank's full range of evolutionary products and services supported by superior customer service," said Graham Honeybill, Rakbank's Chief Executive Officer. The recent replacement of Rakbank's core banking system was another milestone in enhancing customers' experience by ensuring a faster, smoother, and more efficient service.
"The technology upgrade helps support the Bank's portfolio of e-solutions for customers and demonstrates the Bank's commitment to achieving excellence in customer service, which is the driving force behind Rakbank's solid reputation and high levels of customer loyalty," said Honeybill.
Due to the continuing investment in technology as well as branch and ATM networks, operating costs climbed by 13.7% compared to the same period last year. The total impairment charge for the nine months stood at Dhs157.4m against Dhs223m last year, and the total provisions held are considered conservatively adequate for the current loan portfolio.
Gross loans and advances increased by 9.36% to Dhs20.4bn during the nine months. Non-interest income at Dhs489.7m was down by 4% compared to the same period last year primarily because of the impact of regulatory restrictions on fees and charges imposed by the Central Bank since May 2011. However, Rakbank's growth in investment income, foreign exchange, and other fee lines achieved a healthy growth of 18.9% in fee income compared to the third quarter of 2011.
"As a leading retail and small business bank, we are constantly looking for new ways to boost the Bank's capability to further grow our customer base and fee income. The introduction of Islamic Banking products and services planned for early 2013 will aim to capture a wider market by expanding the suite of Rakbank offerings," added Honeybill.
Total assets increased by 8.1% to reach Dhs26.49bn by the end of the nine months with Moody's Investors Service affirming Rakbank's stable outlook in September 2012. Rakbank used its internal resources to fully settle the balance of subordinated debt of Dhs684.47m received from Ministry of Finance in December 2009.
Total Shareholder's equity was Dhs5.33bn at the end of the third quarter after distributing the 2011 cash dividend of Dhs415.6m in May 2012. The Bank's tier 1 and total ratio stands at 19.61% against the regulatory minimum of 12%. As a conservative measure, this ratio was calculated without taking into consideration the interim profit of Dhs1.04bn.
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