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Sun 3 May 2020 11:51 AM

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Rakbank sees 43% drop in Q1 profit due to Covid-19 impact

Bank was on track for one of its best quarters on record until the events around the virus began to unfold

Rakbank sees 43% drop in Q1 profit due to Covid-19 impact

Rakbank CEO Peter England said the bank was on track for one of its “best quarters on record” until the events around Covid-19 began to unfold.

The National Bank of Ras Al-Khaimah (RAKBANK) has witnessed a 43.2 percent drop in net profit in Q1 2020 at AED153.5 million compared to Q1 2019 as a result of higher IFRS 9 provisions that are set as precautionary measures to combat the economic impact of Covid-19.

The provisions are the International Accounting Standards Board's (IASB) response to a financial crisis.

The bank’s total income of AED1.0 billion remained flat year-on-year and increased by 2.1 percent compared to Q4 2019, while its total assets stood at AED59.8bn as of March 31, 2020, having increased 11.7 percent year-on-year and 4.6 percent year-to-date.

Rakbank CEO Peter England said the bank was on track for one of its “best quarters on record” until the events around Covid-19 began to unfold, having had an exceptional January and February.

Its total assets increased by AED2.6bn or 4.6 percent year-to-date, and by AED6.2bn year-on-year, with gross loans and advances being major contributions, having risen by AED1.6bn, as well as the bank placements, which grew by AED3.6bn.

England said the bank is prepared to reduce fees and rates for its customers in Q2 2020 as a result of the UAE's financial stimulus packages.

“We are continuously monitoring the developments of Covid-19 and are always prepared to support our customers facing financial hardship or loss of income due to its economic impact on individuals, SMEs and corporates, including elimination or reduction of many fees and rates,” he said.

"This important step underscores the resilience of UAE's financial system and the strength of our regulators,” he added.

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