UAE's RAK Bank 2012 profit up 16.6%

The National Bank of Ras Al-Khaimah (RAK Bank) reported net profit last year rose 16.6 percent year-on-year to AED1.4028bn (US$381m), the UAE lender announced on Sunday.

The bank’s interest income grew by 12.5 percent year-on-year to AED2.23bn, on the back of a 10.4 percent growth in loans and advances, which stood at AED20.3bn over the 12 months of 2012. Overall revenues climbed 9.7 percent to AED2.9bn.

“2012 marks a very successful year for RAK Bank,” said Graham Honeybill, CEO. “Not only did it see the bank’s implementation of its revamped core banking system, but 2012 also witnessed the preparations for the launch of RAK Bank’s Islamic Banking window.”

The bank’s conservative approach to lending helped credit losses to fall 30 percent year-on-year, meaning non-performing loans remained steady, accounting for 2.5 percent of gross loans on its books at the end of 2012.

Deposits grew 13.3 percent to AED20.7bn which, while costs also rose 13 percent on the bank of new branches in Sharjah and Abu Dhabi and over 50 additional ATMs.

The rise in profits and revenue meant the back was able to pay back AED684m in startup debt to the Ministry of Finance.

Based on these results, the lender’s directors have recommended a stock dividend of 10 percent and a cash dividend of 40 percent, while 56 percent of the net profit will be retained.