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Abu Dhabi, UAEMonday 10 December 2018

RAKBank posts 6.4% net profit rise on higher deposits

UAE lender beat earnings expectations with strong performance across all divisions, CEO says

Peter England, CEO of Rakbank, said ample liquidity and a rise in customer deposits helped boost the lender's profits for the third quarter. Razan Alzayani for The National
Peter England, CEO of Rakbank, said ample liquidity and a rise in customer deposits helped boost the lender's profits for the third quarter. Razan Alzayani for The National

National Bank of Ras Al Khaimah (RAKBank) posted a 6.4 per cent rise in net profit for the third quarter of 2018, driven by ample liquidity and an increase in customer deposits, it said on Tuesday.

Net profit attributable to equity owners rose to Dh239 million ($65m) in the three months to September 30, beating the average Dh236m estimate of three analysts polled by Bloomberg.

“The ample liquidity and rise in customer deposits are reflected in the bank’s solid progress in wholesale banking, business banking, personal banking and treasury,” said RAKBank’s chief executive Peter England.

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Banks in the Arabian Gulf are maintaining profitability this year amid an improvement in the economies on the back of higher oil prices, lower impairments and rise in credit growth.

Net income rose 1 per cent to Dh632m, RAKBank said in a filing to the Abu Dhabi Securities Exchange, where its shares are traded. Customer deposits grew 10.1 per cent year-on-year to Dh34.6 billion, and net assets grew 12.4 per cent year-on-year to Dh51.8bn.

On a nine-month basis, net profit attributable to equity owners rose 9 per cent to Dh668m, the company added.

“The trends for the nine months of 2018 are showing positive signs, and impairments are on a downward trend. The bank remains committed to its diversification strategy, which is now delivering growth in net income while lowering the bank’s risk profile.”

Impairments were reduced by Dh135.1m for the nine months of 2018, compared to the same period of 2017.

In July, RAKBank reported flat net profit at Dh226m for the second quarter of 2018 as operating expenses rose.

This year, the bank increased efforts to improve its digital offering through partnerships with the government of Ras Al Khaimah’s finance department to manage their payment gateway systems, and with Sri Lanka’s Cargills Bank and blockchain provider Ripple to improve money transfer services to Sri Lanka.

RAKBank’s capital adequacy ratio under Basel III banking regulations stood at 18.5 per cent at the end of September. “This level of capital provides the bank with ample room for growth in 2018,” the lender said.