RakBank's third-quarter profit surges 29% after strong business and robust deposits

Lender reports net profit of $123m for the July-September period

RAKBank's total assets surged 10.2 per cent in the January-September period. Photo: RAKBank

National Bank of Ras Al Khaimah reported a 28.7 per cent jump in its third-quarter net profit driven by a growth in customer deposits and all segments of banking.

The lender reported a net profit of Dh452.1 million ($123.09 million) in the July-September period, RAKBank said in a filing to the Abu Dhabi Securities Exchange, where its shares are traded.

Total income during the period rose 24.2 per cent to more than Dh1.1 billion.

“As a leading SME bank in the UAE, we remain steadfast in our support of entrepreneurs and start-ups,” Raheel Ahmed, group chief executive of RAKBank, said in a statement.

“Our existing customers continue to trust and engage with us as we remain committed to delivering awesome customer experiences.”

The bank said it reported its highest-ever net profit of Dh1.35 billion, up 54 per cent, in the first nine months of the year. Total income increased 35.4 per cent to Dh3.3 billion during the period. The company’s total assets surged 10.2 per cent to Dh72 billion.

Wholesale banking revenue jumped 19.2 per cent, while business banking and retail banking reported an increase of 9.3 per cent and 4.8 per cent, respectively, in the January-September period. Customer deposits increased 16 per cent on a yearly basis to Dh48.5 billion, RAKBank said.

Card spends increased by 20 per cent year-on-year and the bank’s digital platform was accessed 11.4 million times during the quarter, marking an 18 per cent annual increase, Mr Ahmed said. It disbursed Dh595 million in business loans in the previous quarter.

Despite growth, RAKBank said it also acknowledged the challenges of "inflation, rising interest rates and geopolitical developments".

“[However,] despite these factors, we remain focused on delivering consistent results, in line with our strategic ambitions,” Mr Ahmed said.

RAKBank is investing up to Dh600 million until 2026 as part of its strategy to increase the digitalisation of its services and develop new business lines as it looks to broaden its revenue base and boost growth, Mr Ahmed told The National in February.

The UAE banking sector is well capitalised with adequate liquidity buffers and remained resilient last year against the risk of stagflation and market uncertainties in central bank’s stress-testing exercise, the UAE Central Bank said in its Financial Stability Report 2022 in July.

RAKBank’s operating expenses soared more than 10 per cent in the first three quarters to Dh1.2 billion. The bank attributed this increase to staff related costs, depreciation, marketing and technology expenses.

The bank’s total cash and cash equivalents stood at Dh3.5 billion as of September 30, while net cash generated from operating activities reached Dh1.1 billion.

The capital expenditure reached Dh110.8 million during the first nine months of the years against Dh58.7 million in the same period last year. This increase was primarily due to the initiatives related to digitisation, regulatory compliance and customer protection, RAKBank said.