Rakbank re­ports Dh1.4 bil­lion profit for 2015

The Pak Banker - - COMPANIES/BOSS -

Rakbank de­clared a six per cent de­cline in its net profit for 2015 on higher pro­vi­sions. The bank an­nounced a Dh1.4 bil­lion net profit for the year, show­ing a marginal de­crease of Dh49.3 mil­lion over the pre­vi­ous year.

Its board be­lieves that the bank is well placed to meet any chal­lenges faced in 2016. Its board rec­om­mended a cash div­i­dend of 50 per cent.The div­i­dend rec­om­men­da­tions will re­sult in 40 per cent of net profit be­ing re­tained within the bank's share­hold­ers equity thereby in­creas­ing cap­i­tal and re­serves to strengthen the bank's over­all po­si­tion and pro­vide sup­port for fu­ture growth.

Rakbank's op­er­at­ing in­come grew by 10.8 per cent year-on-year to Dh3.939.2 bil­lion as net in­ter­est in­come and in­come from Is­lamic prod­ucts net of dis­tri­bu­tion to de­pos­i­tors were up by 10.6 per cent to Dh3.05 bil­lion. Non-in­ter­est in­come grew by 11.7 per cent to Dh890.9 mil­lion. The bank im­proved its cost-to-in­come ra­tio to 37.5 per cent com­pared to 42.3 per cent in 2014 by re­duc­ing op­er­at­ing ex­penses by 1.8 per cent. Its fo­cus on cost op­ti­mi­sa­tion re­sulted in the group's con­sol­i­da­tion of some busi­ness lines in an ef­fort to en­hance syn­ergy and im­prove ef­fi­ciency across its op­er­a­tions. As a re­sult, the op­er­at­ing profit of the group be­fore pro­vi­sions in­creased by 20 per cent to Dh2.460.7 bil­lion.

Pro­vi­sions for loan im­pair­ments in­creased by Dh460.1 mil­lion over last year due to higher loan pro­vi­sion­ing mainly in the un­se­cured lend­ing port­fo­lios. Non-per­form­ing loans and ad­vances to gross loans and ad­vances ra­tio closed at 3.2 per cent com­pared to 2.4 per cent at the end of the pre­vi­ous year.

Its year-on-year to­tal retail bank­ing loans grew by Dh1.33 bil­lion, up by 5.4 per cent over the pre­vi­ous year. The ma­jor suc­cess of the retail bank­ing seg­ment this year was the launch of a new pre­mium bank­ing ser­vice 'RAKelite.' Year-on-year to­tal whole­sale bank­ing loans grew by 138.1 per cent to Dh2.43 bil­lion. Bal­ance sheet booked a 10.6 per cent in­crease in gross loans and ad­vances to Dh28.54 bil­lion across the bank's retail and whole­sale port­fo­lios. The group's to­tal as­sets grew by 16.4 per cent to Dh40.55 bil­lion. Cus­tomer de­posits were up by 12.9 per cent to Dh27.82 bil­lion mainly from an in­crease of Dh2.5 bil­lion in de­mand de­posits and Dh653.2 mil­lion in time de­posits.

Within that, Is­lamic cus­tomer de­posits grew by Dh899.2 mil­lion to Dh3.5 bil­lion com­pared to the pre­vi­ous year. Rakbank chair­man Mo­hamed Om­ran Alshamsi said: "We re­main com­mit­ted to gen­er­at­ing solid and sus­tain­able growth across our retail, whole­sale, trea­sury and in­sur­ance seg­ments." Rakbank chief ex­ec­u­tive of­fi­cer, Peter Eng­land, said: "The bank has faced stronger than ex­pected head­winds in our retail and small busi­ness fi­nance port­fo­lios due to the chal­leng­ing global and re­gional en­vi­ron­ment which is be­gin­ning to have an ef­fect on some seg­ments in the UAE." The bank's Tier 1 ra­tio as per Basel II was 24.4 per cent at yearend af­ter tak­ing into con­sid­er­a­tion the profit for 2015 and the pro­posed div­i­dend, com­pared to 26.5 per cent at the end of 2014, against a re­quire­ment of 12 per cent set by the UAE Cen­tral Bank.

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