The National Bank of Ras Al-Khaimah, RakBank, has announced a consolidated net profit of Dh917.5 million ($250 million) for fiscal year FY 2018, an increase of Dh107 million over the previous year, a media report said.

As at 31st December 2018, the bank’s total assets stood at Dh52.7 billion, growing by 8.5 per cent compared to 2017. Gross loans and advances were Dh34.8 billion, up 4.8 per cent on the previous year, reported state news agency Wam.

RakBank CEO, Peter England, commented, "This considerable increase in net profit was due mainly to an increase in the net interest income and net income from Islamic financing which grew by Dh45.5 million and a decrease of Dh 131.8 million in a provision for impairment in loans.

“The Total Operating Income increased by 0.4 percent, due to higher net interest income, while Operating Expenses increased by Dh41.9 million, up by 2.9 percent compared to last year. There are tangible results to show that the efforts we have made to de-risk certain parts of the business over the last few years have allowed us to reduce provisions and improve the quality of our loan book. In short, the ‘quality’ of our earnings has improved continually over the last 2 years and we expect this trend to continue."

Total Operating Income increased by Dh17.1 million to Dh3.8 billion, mainly due to an increase of Dh45.5 million in net interest income and income from Islamic financing, net of distribution to depositors.

Non-interest income declined by Dh28.3 million to Dh1.1 billion. This was due to a year-on-year decrease of Dh61.2 million in investment income. However, the decrease was offset by an increase of Dh12.7 million for fee and commission income and an increase of Dh24.0 million for foreign exchange and derivative income.

Operating costs increased by Dh41.9 million, an increase of 2.9 percent in 2017. This was mainly due to an increase of Dh7.0 million in staff costs and Dh15.7 million in IT-related expenses. The group’s cost to revenue ratio increased marginally, to 38.9 percent compared to 38.0 percent in 2017. This is expected to taper down in the coming years as income grows and cost optimisation and digitalisation initiatives improve efficiency.

Total assets grew by 8.5 percent to Dh52.7 billion, due to an increase of Dh1.6 billion in Gross Loans and Advances, lending to banks, which grew by Dh956 million, and an increase in investments of Dh1.6 billion.

RakBank’s chairman, Mohamed Omran Alshamsi, stated, "RakBank is placing greater emphasis on connecting new technologies with advanced processes that will deliver state-of-the-art services. In doing so, we aim to better serve our customers by offering a seamless experience across products and services, through industry-leading service excellence, innovation and simplicity."

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