(MENAFN- Khaleej Times) The National Bank of Ras Al Khaimah, or RAKBank, posted a 31.7 per cent jump in first quarter net profit to Dh270.2 million year-on-year.
In a statement, the bank said on Wednesday that its total income rose by 8.5 per cent to Dh1 billion in the first quarter year-on-year, and by 0.9 per cent on fourth quarter 2018. Total assets of the bank grew by Dh822.7 million to Dh53.5 billion, increasing by nine per cent year-on-year and by 1.6 per cent year-to-date.
The major contributions for the asset growth came from gross loans and advances, which grew by Dh1.1 billion; investment securities, which grew by Dh1.1 billion; and cash and Central Bank balances, which grew by Dh831.1 million, the bank said.
"Total income for the first quarter 2019 exceeded Dh1 billion, which is only the second time in RAKBank's history that we have achieved such a result. This is a clear outcome of the Bank's diversification strategy which commenced four years ago and is now delivering solid results," said Peter England, CEO of RAKBank.
England said the bank's non- interest income was very strong for the first quarter rising to Dh317 million which is an all-time high, and was "achieved by impressive results across all business lines especially treasury and wholesale banking and financial institutions units."
"Our diversification strategy has also helped our provision line to graduate down by five per cent year-on-year while retaining a coverage ratio in excess of 130 per cent," he said.
England said beyond its strong financial performance, the bank delivered a range of important initiatives in the first quarter. "We continued to grow and develop our market leading position as the biggest small business bank in the UAE with a number of enhancements to our digital banking proposition and our Innovation Lab continued on the journey of developing exciting new offerings that will be launched through the course of 2019."
He said the outlook for the second quarter continues to be positive, with expectations that the UAE's financial services sector will continue to improve.
The bank's capital total adequacy ratio as per Basel III stood at 17.4 per cent compared to 17.2 per cent at the end of 2018. The regulatory eligible liquid asset ratio at the end of the quarter was 14.5 per cent compared to 14.5 per cent at the end of 2018. The advances to stable resources ratio stood at a comfortable 89.3 per cent compared to 94.5 per cent at the end of 2018.
Total operating income improved by Dh78.4 million to Dh1 billion mainly due to an increase in non-interest income by Dh27.7 million, which was partly offset by an Dh19million decrease in net interest income and income from Islamic products, net of distribution to depositors, which totalled Dh683.8 million.
The bank said interest income from conventional loans and investments increased by 9.3 per cent year-on-year, while interest costs on conventional deposits and borrowings increased by 41.3 per cent. Net income from Sharia-compliant Islamic financing decreased by four per cent and non-interest income improved by Dh65.5 million to Dh317.2 million, mainly due to an increase of Dh32.7 million in net fees and commission income and Dh31.6 million in forex and derivative income. -
Issac John Associate Business Editor of Khaleej Times, is a well-connected Indian journalist and an economic and financial commentator. He has been in the UAE's mainstream journalism for 35 years, including 23 years with Khaleej Times. A post-graduate in English and graduate in economics, he has won over two dozen awards. Acclaimed for his authentic and insightful analysis of global and regional businesses and economic trends, he is respected for his astute understanding of the local business scene.
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