The National Bank of Ras Al Khaimah (RAKBANK) has achieved a record net profit after tax of AED 1.7 billion for the year-to-date September 2024, representing a significant 25% increase compared to the previous year.
This growth was primarily attributed to the expansion of the bank’s loan portfolio across all business segments, improved asset quality, and favourable conditions from higher net interest income.
Operating income for the year-to-date September 2024 rose by 8.1% year-on-year, supported by a net interest margin of 4.6%. This growth is underpinned by diversified asset expansion and a stable, loyal customer base in the Current Account Savings Account (CASA) segment, alongside increased non-interest income.
Operating expenses remained stable at Dh1.2 billion for the same period, maintaining a cost-to-income ratio of 33.6%, down from 36.2% in the previous year. Meanwhile, the bank’s gross loans and advances reached Dh48.9 billion as of September 2024, a 19.1% increase year-on-year, with significant growth in Wholesale Banking loans and advances by 41%, aligning with its diversification strategy.
Customer deposits increased by 18.2% year-on-year to Dh7.3 billion, with a CASA ratio of 62.4%, one of the highest in the industry. The portfolio’s credit quality remains strong, with the cost of risk at 1.6% year-to-date, down from 2.5% the previous year, supported by a benign credit environment and a strategic business shift towards secured, low-risk assets.
RAKBANK’s provisions coverage on gross loans and advances is at 5.6%, compared to 5.9% in September 2023. Shareholder returns are robust, with a Return on Equity (ROE) of 20.6% and Return on Assets (ROA) of 2.9%.
“RAKBANK achieved record profitability in YTD September 2024,” said Raheel Ahmed, the Group CEO. This success is underpinned by strong balance sheet growth on both sides of the balance sheet, a well-diversified business mix and prudent risk management, positioning us well for continued growth. The Bank remains well capitalised and continues to deliver strong shareholder returns.”
RAKBANK reported a capital adequacy ratio (CAR) of 19.6% for Q3 2024, up from 17.8% at the close of the previous fiscal year. Its strong liquidity position is further evidenced by an Eligible Liquid Asset Ratio of 15.0% and Advances to Stable Resources Ratio at 80.4%. The impaired loan ratio improved to 2.2% as of Q3 2024, compared to 2.6% at the end of the previous fiscal year.
Quarterly results
Key financial highlights for the third quarter of 2024 include a profit before tax of AED 659 million, reflecting a 45.7% year-on-year increase. Operating income for Q3 2024 was AED 1,204 million, a 7% rise year-on-year.
Gross loans and advances for the quarter increased by 12.1% compared to Q2 2024, driven by growth across all segments, with the Wholesale banking portfolio closing at Dh16 billion. However, customer deposits saw a slight decrease of 2.1% compared to Q2 2024, due to the maturation of high-cost time deposits during the quarter.
“As we enter the final quarter of 2024, we remain focused on continuing to execute our strategic goals,” Ahmed added. “The UAE economy also continues to demonstrate resilience, supported by stable oil prices, real estate growth, and a thriving trade and tourism sector. However, we remain vigilant of the global macroeconomic environment as we continue to navigate the year with agility and foresight.”
