RAKBank profits rise 22.7% in first quarter of 2025

22/04/2025 03:05 AST

RAKBank's total assets increased by Dh12.2 billion, reflecting a growth of 15.5 per cent compared to the first quarter of 2024.

The National Bank of Ras Al Khaimah (RAKBank) on Monday announced that first quarter profit after tax rose 22.7 per cent to Dh70 million.

Operating profit stood at Dh866 million, up 10.2 per cent year on year, on the back of strong growth in balance sheet and non-interest income. Operating expenses grew by 11.8 per cent vs last year driven by continued investments in technology, data, people and customer experience. Cost to income ratio (CIR) at 33.4 per cent vs. 33.1 per cent for the first quarter of 2024.

Total assets have crossed Dh90 billion for the first time in the bank's history. Gross loans and advances surpassed Dh50 billion mark, reflecting a 16.7 per cent year on year increase. Growth driven by all segments, with wholesale banking loans growing by 30.1 per cent year on year, aligning with the bank's diversification strategy.

Customer deposits reached Dh61.0 billion, up 18.2 per cent year on year, with a CASA1 ratio of 65 per cent, up 10.2 per cent year on year, one of the highest in the industry.

Portfolio credit quality remains robust with cost of risk at 0.8 per cent as against 1.5 per cent during the same period last year, supported by a strategic shift in business mix towards secured, low risk assets.

RAKBank's impaired loan ratio as at the first quarter of 2025 improved to 2.1 per cent against 2.6 per cent as at the first quarter of 2024 while provisions to gross loans ratio of 5.6 per cent compared to 6.0 per cent as of the first quarter of 2024, providing adequate coverage. Shareholder returns remained strong with return on equity (ROE) of 22.4 per cent against 21.4 per cent in the first quarter of 2024 and return on assets (ROA) of 3.2 per cent against 3.1 per cent in the first quarter of 2024.

Capital adequacy ratio
The bank remains well capitalised with capital adequacy ratio (CAR) at 18.6 per cent for the first quarter of 2025 against 17.2 per cent as at the first quarter of 2024.

Strong liquidity position is reflected by an eligible liquid asset ratio of 17.1 per cent vs. 13.5 per cent at the first quarter of 2024 and advances to stable resources ratio at 76.4 per cent vs. 78.7 per cent at the first quarter of 2024.

Total assets increased by Dh12.2 billion, reflecting a growth of 15.5 per cent compared to the first quarter of 2024, with an increase in gross loans and advances of Dh7.2 billion, investments by Dh1.9 billion and cash and balance with CBUAE by Dh4.1billion.

Wholesale banking significantly contributed to the growth of the balance sheet, with segmental assets growing by Dh4.8 billion, a 12.3 per cent increase compared to the first quarter of 2024.

Business banking assets grew by Dh589 million, a 5.8 per cent increase compared to Q1 of last year delivered primarily through growth in SME and commercial loans.

Personal banking loans and advances rose by Dh2.8 billion to Dh23.1 billion compared to last year with mortgage and leverage loans driving growth, bringing in Dh2.0 billion and Dh728 million year-over-year respectively

Customer deposits increased by 10.2 per cent to reach Dh61billion, while maintaining one of the industry's highest current and savings accounts (Casa) ratios at 65 per cent.

"Our Q1 2025 performance highlights the sustainability of our strategy, driven by strong growth across all business lines. We continue to invest heavily in our technology, data and experience capabilities whilst maintaining cost discipline," said Raheel Ahmed, group chief executive officer, RAKBank. "The global outlook remains uncertain as newly introduced U.S. tariffs raise concerns around trade flows and economic stability. Despite this, the UAE continues to demonstrate resilience, supported by strong economic measures. We remain confident in the UAE's solid foundation and are committed to supporting our customers through these uncertain times," he added.

Khaleej Times