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Sun 24 Oct 2010 04:36 PM

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RAK Bank profit jumps 37.5% as interest income gains

Loan provisions rise to $11.8m; UAE bank sees improvement in economic conditions

RAK Bank profit jumps 37.5% as interest income gains
RAK Bank said it saw signs of recovery in the regions economic environment

National Bank of Ras al-Khaima,h the UAE lender known as RAK Bank, on Sunday said net profits rose 37.5 percent to AED729.8m ($198.69m) during the first nine months of 2010 bolstered by interest income.

Net interest income increased 35.5 percent year-on-year to AED1.2bn ($326.7m) and gross loans and advances rose to AED16.2bn ($4.41bn), a rise of 23.4 percent compared to the same period last year, the bank said in a statement.

Despite the bank’s loan provisions for the first nine of the year rising AED43.6m ($11.8m) to AED210.3m ($57.25m), it said it was “seeing an improvement in trends quarter-on-quarter.”

“With some recovery signs seen in the current economic environment, the bank continues to seek good lending opportunities and remains receptive to market opportunities,” said Graham Honeybill, general manager, RAK Bank.

Income from fees, commission and other non-loan sources grew 22.9 percent from the year-earlier period to AED459.7m ($125.15m) between January and September 2010.

An increase in shareholders’ equity and customer deposits saw the bank’s asset book grow to AED21.6bn ($5.88bn), an increase of 31.6 percent compared to the same period last year.

In the first nine months of the year, RAK Bank bought $53.5m of its own bonds from the market and stated that it intends to repay the balance of owed as part of its bond programme from its own internal resources.

The banks’ portfolio of investments stood at AED358.8m ($97.68m) on September 2010, with AED56.3m ($15.32m) maturing during the last nine months.

The lender said in a statement that it “intends holding all investments to maturity and does not anticipate any loss on any of its investments, all of which are in the names of domestic institutions.”

Established in 1976, RAK Bank has around 340,000 customers and 28 branches across the UAE.

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