Rakbank Q1 Profit Tops Dh1 Billion As Assets And Deposits Surge

(MENAFN- Khaleej Times) RAKBank on Monday announced that it posted its strongest ever quarterly performance in the first three months of 2026, reporting a profit after tax of Dh1 billion, a 43 per cent increase year-on-year, buoyed by balance sheet growth, widening margins and a one-off gain from an asset sale.

The record result was supported by double-digit growth across core metrics, with total assets rising 18 per cent over the year to Dh107.3 billion, while customer deposits climbed 22 per cent to Dh74.3 billion, underlining strong liquidity conditions amid continued lending momentum. The bank's eligible liquid assets ratio stood at 17.7 per cent, reinforcing its capital strength.

Recommended For You Trump says Iran violated ceasefire, threatens strikes on power plant if deal fails

A key driver of profitability was improved returns, with return on common equity jumping to 29.9 per cent, up from 22.4 per cent a year earlier, while return on assets increased to 3.9 per cent from 3.2 per cent. The surge in profitability was also boosted by a Dh473 million gain from the sale of the bank's merchant acquiring business, which lifted earnings during the quarter.

Operational performance benefited from an industry-leading net interest margin of 4.0 per cent, supported by a current and savings account (CASA) ratio of 65.6 per cent, helping contain funding costs despite a competitive rate environment. The bank reported that growth was spread across corporate, SME and retail segments.

Balance sheet expansion was accompanied by improving asset quality. The impaired loans ratio declined to 1.9 per cent, down from 2.4 per cent a year earlier, reflecting tighter underwriting standards and disciplined risk management. This improvement was backed by one of the highest provision coverage ratios in the sector at 277 per cent as of March 2026.

Capital buffers also remained strong, with a capital adequacy ratio of 18.7 per cent, comfortably above regulatory requirements, providing headroom to support future growth.

The results highlight a broader trend among UAE lenders, where robust economic activity, stable asset quality and selective balance sheet expansion have continued to underpin earnings, even as banks manage the impact of tighter financial conditions and increased competition for deposits.

RAKBank's first-quarter performance positions it among the fastest-growing banks in terms of profitability metrics, with liquidity, capital and asset quality providing a cushion against near-term volatility while supporting further expansion across its key customer segments.

MENAFN20042026000049011007ID1111007003