Dubai: RAKBank on Tuesday reported a net profit of Dh700.4 million for the first half of 2014, dow Dh59.6 million over the same period last year.
For the second quarter ended June 30, 2014 the net profit was Dh365.8 million, which was higher by Dh31.3 million over the quarter ended March 31, 2014.
The bank attributed the decline in first-half 2014 profits to more normal levels of provisions for bad debts after abnormally low numbers in the first half of 2013.
The bank’s total assets stood at Dh34.5 billion at the close of the first half, growing 21.8 per cent year-on-year and 14.7 per cent on a year-to-date basis.
Gross loans and advances stood at Dh23.9 billion, up 12.9 per cent year-on-year and 6.9 per cent on a year-to-date basis.
Gross Islamic financing assets increased by Dh1.1 billion compared to 31 December 2013.
On the liability side, the bank’s customer deposits grew by Dh2.4 billion to Dh25.5 billion compared to 31 December 2013. The growth came mainly from a rise of Dh1.1 billion in conventional demand deposits, Dh687 million in call deposits and Dh467 million in savings deposits. This was offset by a decrease in conventional time deposits by Dh412 million. However, there was a healthy growth in Islamic deposits of Dh599 million from what was registered at the end of 2013.
“We are seeing solid growth in almost all of our lines of business and the focus for the rest of 2014 is to strongly grow the bank’s top line as the full impact of our loan pipeline continues to flow through,” said Peter England, RAKBank chief executive officer.
RAKBank’s first half operating income increased by Dh156.9 million to Dh1.7 billion, an increase of 10.2 per cent compared to the half year ended June 20, 2013. This growth was mainly due to an increase of Dh114.9 million in net interest income and income from Islamic financing, and Dh42.0 million in non-interest income, which climbed by 12.3 per cent over the same period last year. Operating costs increased by 11.5 per cent to Dh740.2 million compared to the same period last year mainly due to increases in employment costs.
Net interest income plus net profit from Islamic financing for the half year ended 30 June 2014 grew by 9.6 per cent compared to the half year ended June 20, 2013 to Dh1.3 billion.
The total impairment charge for the half year stood at Dh258.4 million compared to Dh118.2 million half year ended June 30, 2013. Non-performing loans were steady at 2.4 per cent of the loan portfolio and the annualised net credit losses-to-average loans and advances closed at 2.2 per cent.
The bank’s capital adequacy ratio as per Basel II requirement at the end of the quarter was 25.51 per cent, comprised entirely of Tier-1 capital.
“We are seeing exceptionally strong growth in our SME and commercial lending, which is a major engine for growth at RAKBank. With a strong economic outlook for the UAE, we are confident that we can continue to build on our success in the market as we look ahead to the second half of 2014,” England said.