RAKBank, known for its innovative banking solutions, recently announced impressive financial results for the first half of 2024. The bank reported a record net profit after tax of Dh1.1 billion, marking a remarkable 21 percent increase compared to the previous year. This growth was attributed to the bank’s diversified growth in balance sheet, continued sales momentum, and strong credit quality.
The bank’s income also saw a substantial 8.7 percent year-on-year growth, supported by a net interest margin of 4.6 percent. This growth was fueled by well-diversified asset growth and a strong CASA base, along with higher Foreign Exchange and Investment income. Additionally, the bank’s operating expenditure increased by 3.0 percent year-on-year to Dh789 million as it focused on growing the business and investing in technology and talent.
According to Raheel Ahmed, the group CEO of RAKBank, the bank’s strategic transformation is progressing well, and the goal of becoming a ‘digital bank with a human touch’ is on track. The bank aims to continue diversifying its balance sheet, reducing its risk profile, and introducing new innovative products and services for its customers while delivering strong shareholder returns.
In a significant milestone, RAKBank became the first bank in the region to issue a social bond. This initiative is aligned with the bank’s commitment to supporting SMEs and the UAE economy. The proceeds from the bond will be used to support the healthcare industry and provide loans to Micro, Small, and Medium Enterprises, in line with the UAE’s vision for 2031.
Looking ahead, Ahmed highlighted that RAKBank remains watchful of geopolitical dynamics, including ongoing military conflicts and economic indicators in major economies like the USA and China. However, the UAE economy has shown resilience, driven by factors such as oil prices, real estate, trade, and tourism. The bank is entering the second half of 2024 with confidence as it continues to build on its strengths and strategically deliver on its goals.
Key financial indicators for RAKBank include gross loans and advances reaching Dh43.7 billion, a 9.4 percent increase year-on-year, driven by growth across all segments. Customer deposits also grew by 19.4 percent to Dh58.5 billion year-on-year, with a robust portfolio credit quality and total provisions coverage on gross loans and advances improving compared to the previous year.
Shareholder returns remained strong, with Return on Equity (ROE) at 20.4 percent and Return on Assets (ROA) at 2.9 percent. The bank also maintained its liquidity and capital adequacy, with a Capital Adequacy Ratio (CAR) of 18 percent. Overall, RAKBank’s financial performance and strategic initiatives position it well for continued growth and success in the banking sector.
