The Ras Al Khaimah-based lender's net income hits Dh224.8 million
Rakbank's third quarter profit more than doubles as impairments shrink
The National Bank of Ras Al Khaimah (RAKBank) said its net profit more than doubled in the third quarter, boosted by a drop in money set aside to cover bad debt and an increase in net interest income.
Net profit increased 106.7 per cent to Dh224.8 million in the three months ended September 30, compared with Dh108.8m in the same period last year.The figure was in line with an average of three analysts’ forecasts compiled by Bloomberg.
Provisions for impairment were reduced by 27.8 per cent to Dh369.3m in the quarter versus Dh511.8m in the same period last year. Net interest income gained 1.9 per cent to Dh699.3m in the quarter versus Dh686.2m.
“RAKBank’s performance these past nine months is a reflection of the bank’s diversification strategy that was initiated a few years ago,” said chief executive Peter England.
“All the various segments wholesale banking, business banking, personal banking and treasury have made solid progress throughout the year. Whilst diversifying our loan book and growing into new areas in treasury and wholesale banking particularly, the bank remains very committed to the small and medium sized segment despite the challenges faced in the area in the past two years.”
Slow lending has crimped the profitablility of some banks in the UAE over the past year amid sluggish economic growth and subdued consumer confidence in the wake of a three-year oil price slump in which crude prices have fallen by more than half of their 2014 highs.
SMEs - a segment strongly targeted by Rakbank - have been were particularly affected by the downturn, slump, leaving a pile of accumulated bad debt and prompting a number of business owners to abscond skip town.
Demand for business and personal loans across the UAE rose marginally in the past quarter, with a further increase predicted in the current quarter, according to a UAE Central Bank survey released this week.