RAKBank reported on Monday a record net profit after tax of Dh1.1 billion, a growth of 21 per cent year-on-year, driven by diversified growth in balance sheet, continued sales momentum, and strong credit quality.
In a statement, the bank said its income grew 8.7 per cent YoY, supported by a net interest margin of 4.6 per cent, on the back of well-diversified asset growth and sticky CASA base, augmented by higher Foreign Exchange & Investment income.
The lender’s operating expenditure was at Dh789 million, reflecting a growth of 3.0 per cent YoY, as it continues to grow the business and invest in technology and talent on a sustainable basis, said the statement.
“Our strategic transformation remains on course, and we are making strong progress on becoming the ‘digital bank with a human touch’. The progress of our transformation is evidenced in our record-breaking financial performance in H1 2024,” said Raheel Ahmed, group CEO of RAKBank.
The bank will continue to diversify its balance sheet, reduce its risk profile, and add on new innovative products and services for its customers. The bank remains well-capitalised and delivers strong shareholder returns, said Ahmed.
“We’ve made significant strides in enhancing accessibility for our customers anytime, anywhere. Our customers logged into our digital banking platforms 24 million times in H1 2024 (up 13 per cent YoY). In personal banking, 98 per cent of financial transactions were conducted digitally. Since the launch of our digital onboarding journeys, 83 per cent of Personal banking accounts are now opened digitally, and 49 per cent of new bank cards are initiated through this digital onboarding. What I’m particularly pleased about is the progress in our cultural transformation, empowering our colleagues to take ownership of delivering an awesome customer experience,” he said.
Ahmed noted that RAKBank has become the first bank in the region to issue a social bond. This is a key milestone for the bank as it reinforces its commitment to supporting SMEs and the UAE’s economy. “In line with our Social Finance Framework, the bond proceeds will be utilised to support the healthcare industry and provide loans to Micro, Small & Medium Enterprises, in line with “We the UAE 2031” vision.”
“As we enter the second half of 2024, we remain watchful of the geo-political dynamics shaped by elections affecting 72 per cent of the world’s population, ongoing military conflicts, and economic indicators in major economies like the USA and China. However, the UAE economy remains resilient on the back of oil prices, real estate, trade and tourism. We approach the second half of 2024 with confidence as we remain committed to building on the Bank’s strengths and delivering on our strategy,” said Ahmed.
Gross loans and advances stood at Dh43.7 billion, up 9.4 per cent YoY, driven by growth across all segments, with wholesale banking loans and advances growing by 19.4 per cent in line with the bank’s diversification strategy.
While customer deposits grew 19.4 per cent to Dh58.5 billion YoY, with a CASA ratio of 61.6 per cent portfolio credit quality remained robust with cost of risk at 1.7 per cent versus 2.6 per cent in H1’23, supported by benign credit environment and shift in business mix towards secured low risk assets. Total provisions coverage on gross loans & advances rose to 6.1 per cent compared to 5.7 per cent in H1’23.
Shareholder returns remained strong with Return on Equity (ROE) of 20.4 per cent and Return on Assets (ROA) of 2.9 per cent. “The bank remains liquid and well capitalised with Capital Adequacy Ratio (CAR) at 18 per cent vs. 17.8 per cent as at 31st December 2023.”