RAKBANK announces record profit for 2010

RAKBANK has announced AED 1,002.75 million profit in 2010, an increase of 38.1% in net profit compared with AED 726.2 million for the previous year. RAKBANK has successfully surpassed the billion dirham profit mark in 2010 as it continued to focus on good opportunities in its chosen lending segments of personal, auto, and small and medium enterprise (SME) loans, in addition to credit cards and mortgages.  

“RAKBANK’s record results at a time of sluggish market conditions are a testament to the Bank’s consistent business strategy and robust performance,” said Graham Honeybill, RAKBANK General Manager. “RAKBANK’s profitability is a result of the Bank’s prudent policies and underwriting processes, and more importantly, the Bank’s successful foundation in service excellence, which has helped to grow business by retaining and expanding our valued customer base.” 

During 2010, RAKBANK was recognised from among 21 national and foreign banks as the ‘Best Overall Bank’ in customer service in the UAE for the fifth consecutive year in an independent study of the UAE retail banking industry conducted by service specialists Ethos Consultancy. 

“As RAKBANK continued to lend in 2010, we also took advantage of the significant business opportunities identified in the first six months of the year to increase lending volumes,” added Honeybill. As a result of these opportunities, net interest income increased by 30.9% over 2009 to AED1.61 billion. Total advances as at 31^st December 2010 increased by 22.1% over the previous year to reach AED16.4 billion, while total assets jumped by 25% to close at AED 21.4 billion. 

The growth in the asset book has been supported by a combination of increases in shareholders equity and customer deposits, with Total Deposits growing by 32.7% to close at AED 17 billion compared with AED 12.9 billion in 2009. In addition to this growth in assets, other income consisting of fees, commissions, foreign exchange, investment and other operating income grew by 22% to AED 605 million.  

To sustain its rapid growth, RAKBANK increased its branch and ATM network over the past year to complement its growing presence on Online Banking. The Bank currently has 29 branches across the UAE with plans to open eleven more by the end of 2012. 

The Bank took adequate provisions in 2010 on its portfolio. Even though net credit losses increased by 7.1% to AED 269.8 million in 2010 from AED 251.9 million in 2009, it covered a larger asset base. RAKBANK’s trend in credit losses improved noticeably towards the end of the year, as impairment charges for the last quarter of 2010 dwindled to AED 59.5 million from AED 81.3 million registered for the first quarter. 

Liquidity ratio for the year 2010 stood at 18.2% at year end compared to 16.8% at the end of 2009. During 2010, AED 1.07 billion of the Bank’s EMTN programme matured and was repaid by the Bank from internal resources. 

The Bank’s capital adequacy ratio as per Basel I at end of the year was 15.4% composed entirely of Tier 1 capital against a current minimum of 12% of Tier 1 capital set by the Central Bank of the UAE. 

RAKBANK will continue to focus on the delivery of quality products for its retail and small business customers, allied with a high level of customer service quality. “RAKBANK remains vigilant and well positioned to take advantage of potential business opportunities as they present themselves in 2011,” concluded Honeybill.