RAKBank reported a consolidated net profit of Dh534.7 million for the nine-month period ended 30 September 2021. Image Credit: Supplied

Dubai: The National Bank of Ras Al-Khaimah (RAKBank) announced a consolidated net profit of Dh534.7 million for the nine-month period ended 30 September 2021, up 21.9 per cent compared Dh438.6 million for the same period last year.

An increase in in the net profit throughout the year is attributed to factors such as a reduction in the provisions for credit losses along with an increase in non-interest income to Dh258.9 million on the back of a growth in the net fee and commission income as well as an increase in other operating income.

“We have seen a continual improvement in asset quality at RAKBANK especially in the last 2 quarters, which has led to a significant improvement in profitability. We have already surpassed our full year 2020 profit numbers in the first 3 quarters of this year,” said Peter England, CEO of RAKBank.

Bank’s total income decreased by 11.5 per cent to Dh2.43 billion, compared to the same period last year, mainly due to a decrease in net interest Income and net income from Islamic financing by Dh342.5 million on account of the lower mix of high yielding assets. This was partially offset by higher non-interest income of Dh24.1 million.

Net interest income and net income from Shariah-compliant Islamic financing weakened by 17.4 per cent year-on-year to Dh1.62 billion and the non-interest income increased by 3 per cent to Dh816.8 million.

Balance sheet

The total assets of Dh54.5 billion as at September 30, 2021 was up by 4.1 per cent year-on-year and by 3.3 per cent year-to-date. Increase in assets is mainly attributed to to the increase in investment securities by Dh2.1 billion and in gross customer loans & advances increased by Dh884.4 million.

Asset quality

Provisions for credit loss decreased by Dh407.2 million year-on-year. The non-performing loans and advances to gross loans and advances ratio closed at 4.5 per cent compared to 5.2 per cent as at 31 December 2020. Additionally, the annualised net credit losses to average loans and advances ratio closed at 3.6 per cent compared to 4.9 per cent year-to-date through September 2020.

“The improvement in asset quality has come about due to the change of mix in our loan book, which we have been gradually implementing over the last few years, and also the significant improvement in the macro-economic environment due to the exemplary handling of the COVID-19 pandemic by the Leadership of the UAE. We see these very positive trends continuing into the 4th quarter which will bode well for a strong start to 2022,” said England.

Capital and liquidity

The bank’s capital adequacy ratio as per Basel III was 17.8 per cent compared to 18.6 per cent as at the end of the previous year.

The common equity tier 1 ratio of the bank stood at 16.7 per cent. The regulatory eligible liquid asset ratio was 10.4 per cent as at the end of September 2021. The advances to stable resources ratio stood comfortably at 83.9 per cent.