RAK Bank branch in Bur Dubai. Image Credit: Gulf News Archives

Dubai The National Bank of Ras Al Khaimah (RAKBank) Group (RAKBank) on Wednesday reported net profit of Dh839.4 million for the nine-months period, up 24.9 per cent year-on-year.

For the third quarter of 2019 the bank’s profits were up 18.5 per cent year on year to Dh284.5 million.

“Looking at the year-to-date results, net profit increased by 24.9 per cent on the back of strong income growth and a continued reduction in provisions despite a challenging external environment,” said Peter England, CEO of RAKBank.

For the nine months ended 30 September 2019, the bank’s total income increased by 5.8 per cent to Dh3 billion compared to the same period in 2018.

Net interest income and net income from Islamic finance for the first nine months of 2019 was Dh2.1 billion, up by 1.2 per cent year-on-year. Non-interest income improved by Dh138 million year-on-year to Dh907 million, mainly due to an increase of Dh74 million in Forex & derivative income and Dh54 million in fee & commission income.

“The standout performer of the year continues to be fee income, with all business units recording solid growth in this area relative to their performance in 2018, leading to a 17.9 per cent increase in this line,” said England.

Operating expenses increased 5.6 per cent year-on-year and the cost to income ratio for the period closed at 39.2 per cent.

Gross loans & advances increased by Dh1.5 billion (4.3 per cent) during the period to Dh36.3 billion. Customer deposits grew by Dh2.3 billion to Dh36.5 billion, up 6.8 per cent compared to year-end 2018.

Impairments decreased by 9.9 per cent in the third quarter and for the nine-month period it was down 6.3 per cent year -on-year. Non-performing loans and advances to gross loans and advances ratio closed the period at 3.7 per cent compared to 4.2 per cent as at 31 December 2018.

The bank’s total capital adequacy ratio stood at 17.5 per cent at the end of September 2019 with the common equity tier 1 ratio at 16.4 per cent.

“Diversification of our balance sheet whilst retaining a firm commitment to the SME [small and medium enterprises] sector has been at the heart of our strategy over the last 5 years and the results of this continues to bear fruit in terms of sustained income growth and lower provisions,” England said.