RAKBANK delivers highest ever half yearly net profit of AED 901M, up 71% year on year

RAS AL KHAIMAH, 26th July, 2023 (WAM) – The National Bank of Ras Al Khaimah (RAKBANK) today reported its financial results for the first half of 2023 (H1’23).


Raheel Ahmed, Group Chief Executive Officer, RAKBANK, said, “We continue to make strong progress in implementing our new strategy to build a ‘digital bank with a human touch’. At the same time we consistently pivot the culture and mindset of our company to being ‘customer first’ in everything we do.


‘’Our active customer base grew 5% YoY. In H1 we supported over 900 customers with home loans. Being the ‘go to’ SME bank of the UAE, we opened 7,800 accounts for budding entrepreneurs and small businesses. We also disbursed over AED 1 billion of business loans. Our wholesale banking business is now well established with strong product capabilities and is growing in double digits.

Our existing customers continue to increase their trust and engagement with us. Our deposits grew by 19% YoY with robust growth in operating accounts. Spends on our cards are up 20% YoY. Our digital banking was accessed over 21M times in H1 (up 15%) and digital transactions have grown over 10% YoY.

A deep-rooted commitment to contribute back to the society in which we operate is embedded in our DNA. We actively promote financial inclusion and green financing solutions. In line with UAE’s vision for Net Zero by 2050, we have partnered with Honeywell to reduce our electricity consumption by 20% in next 12 months.

Whilst the UAE economy continues to demonstrate positive momentum & growth as we enter the second half of 2023, we do remain cautious about the global macro environment and the downstream impact of rising interest rates & inflation on our customers.

‘’We enter the second half of the year with great excitement as we prepare to launch a range of transformational initiatives in the market. These initiatives will showcase our relentless commitment to innovation and our dedication to meeting the evolving needs of our customers.'' he concluded.

Key Highlights

Profitability growth supported by Income momentum

• 70.8% increase in net profit to AED 900.8 million in H1 2023. Net profit for the quarter at AED 450.5 mn up 46.6% compared to Q2 2022, reflecting the highest quarterly net profit since 2015.


• Net interest income and income from Islamic products net of distribution to depositors was AED 1.6 billion.


• Interest income from conventional loans and investments was up by 80.9% compared to H1 2022, and interest costs on conventional deposits and borrowings was up by 278.0%. Net income from Sharia-compliant Islamic financing was up by 9.2%.


• Non-interest income was up by AED 133.6 mn to AED 572.1 mn mainly due to an increase of AED 96.1 mn in forex and derivative income, Investment income increased by AED 31.7 mn and net insurance underwriting profit increased by AED 12.0 mn. This was partly offset by AED 3.8 mn decrease in net fee and commission and AED 2.3 mn decrease in other operating income.


• The total operating income was up by AED 647.4 mn compared to H1 2022, mainly due to increase in interest income by AED 513.8 mn and increase in non-interest income by AED 133.6 mn.


• Operating expenditure at AED 794.6 mn for H1 2023 reflected an increase of 7.4% as compared to H1 2022 and 10.3% as compared to Q2 2022 as the bank continued to invest for growth. Compared to the previous quarter, the operating expenditure is higher by 4.3%.

• Compared to H1 2022, operating expenses for first half of this year were higher by 7.4%. This was mainly due to an increase of AED 30.4 mn in staff costs, AED 21.4 mn increase in other operating expenses, AED 10.9 mn in card expenses and AED 2.7 mn in technology expenses. This was partly offset by AED 7.9 mn in occupancy costs and AED 3.2 mn in communication costs.


• Cost-to-income ratio for the bank decreased to 36.3% compared to 48.0% at the end of same period last year and 43.0% for FY 2022.


• Provision for credit loss at AED 494.0 mn as at H1 2023, increased by 80.0% compared to H1 2022 and 85.8% compared to Q2 2022.


• Net credit losses to average loans and advances closed at 2.6% compared to 1.5% as at end of first half of 2022.


• Balance sheet crosses AED 71 bn as the total assets increased year to date by AED 5.5 bn reflecting a growth of 8.3%, due to an increase in gross loans and advances by AED 1.8 bn, cash and Central Bank balance increased by AED 2.2 bn, Lending to Banks which increased by AED 1.4B and Investments increased by AED 260M.

• Lending in the retail banking increased by AED 888 mn, wholesale banking segment increased by AED 376 mn and business banking lending increased by AED 495 mn compared to 31 December 2022. Strong balance sheet momentum was visible across all the segments.


• Customer deposits increased by 19.4% as against first half of 2022 and 9.1% or AED 4.1 bn to AED 49.0 bn compared to 31 December 2022 mainly due to an increase of AED 2.5 bn in time deposits and AED 1.6 bn in CASA accounts, endorsing the trust our customers place in the RAKBANK franchise and our services.

• The Bank’s total capital ratio as per Basel III, after the application of prudential filter was 17.7% compared to 16.4% at the end of the previous year.

• The regulatory eligible liquid asset ratio at the end of the first half was 15.1%, compared to 12.8% as at 31 December 2022, and advances to stable resources ratio stood comfortably at 79.9% compared to 79.4% at the end of 2022.