National Bank of Ras Al Khaimah, also known as RAK Bank, said on Wednesday that its new Islamic Finance unit achieved a small profit during its first year in operation.
The UAE bank said its AMAL division broke even ahead of target, recording a small profit of AED3 million ($816,792) for the year.
Overall growth in net profit for the year was subdued due to the bank taking a further conservative stance on provisioning, the bank said in a statement.
Total impairment charges rose to AED340.6 million from last year’s AED209.1 million.
Gross loans and advances grew by 8.5 percent to AED22.4 billion at year-end, AED1.2 billion of which came from Islamic financing assets, it said.
It added that the bank's total operating income increased by AED257.2 million to AED3.2 billion, an increase of 8.9 percent over 2012.
Net interest income and income from Islamic financing grew by 5.5 percent while non-interest income increased by 20.2 percent to AED793.4 million.
The bank said non-performing loans made up only 2.4 percent of the loans and Islamic Finance portfolio compared to 2.5 percent at the end of last year.
“In 2013 RAK Bank continued to produce robust results, affirming the bank's strategy to focus on personal and SME banking, continued focus on product innovation and customer service, and generally improving market conditions,” said Peter England, RAK Bank CEO.
“We have seen solid growth in the balance sheet for most of the bank’s business lines. Fee income also grew very strongly for the year and costs were contained, further reducing our cost income ratio, all of which are very positive signs for the future."
Customer deposits grew by 11 percernt to AED23.1 billion, of which AED2 billion were Shari’ah-compliant deposits with AMAL.
Total assets grew by 10.6 percent to AED30.1 billion.
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