RAKBANK Achieves Record Profit of AED 1.9B for the First Nine Months of 2024, Up 37% Year-on-Year

The National Bank of Ras Al Khaimah (RAKBANK) has reported a remarkable financial performance for the first nine months of 2024, achieving a record profit before tax of AED 1.9 billion, reflecting a year-on-year growth of 37%. This milestone is attributed to the bank's strategic execution, sustained business momentum, and robust credit quality. The growth comes amidst a dynamic market environment, underscoring RAKBANK's strong operational performance across all segments.

Key Financial Highlights – September 2024 Year-to-Date (YTD):

• Total Income: AED 3.6 billion, up 8.1% year-on-year (YoY).
• Total Assets: AED 83.9 billion, a 16.5% YoY increase.
• Customer Deposits: AED 57.3 billion, representing an 18.2% YoY growth.
• Gross Loans and Advances: AED 48.9 billion, up 19.1% YoY.
• Return on Equity (ROE): 20.6%.
• Return on Assets (ROA): 2.9%.
• Cost of Risk: Improved to 1.6% YTD September 2024 from 2.5% during the same period in 2023.
• Capital Adequacy Ratio (CAR): 19.6% as of Q3 2024, up from 17.8% at the close of FY 2023.

The bank’s growth in profitability is largely driven by an increase in net interest income, improving credit quality, and the expansion of its loan portfolio across all business segments.

Innovative Initiatives and Digital Advancements
RAKBANK is at the forefront of financial innovation in the UAE, launching various digital solutions to enhance the banking experience. One of the standout initiatives is Protego.ae, an insurance aggregator platform designed to offer customers greater flexibility in selecting insurance products. Additionally, Skiply 2.0, the bank’s family super app, now caters to a broader range of family needs, including tuition fees and extracurricular activities. With more than 300 institutions and over 270,000 students using the app, Skiply has become an essential tool for managing family expenses.

Moreover, RAKBANK made history as one of the first banks in the UAE to facilitate international remittances using China’s digital Yuan (eCNY) in exchange for the Digital Dirham (CBDC). This milestone transaction was executed through the mBridge platform, highlighting the potential of Central Bank Digital Currencies (CBDCs) to revolutionize cross-border payments by offering faster, more transparent, and cost-effective solutions.

Wholesale and SME Banking Performance
RAKBANK’s wholesale banking portfolio has seen strong growth, closing at AED 16 billion for Q3 2024. This represents a 41% YoY increase, reflecting the bank’s strategy to diversify its portfolio and tap into new market segments. The Wholesale Banking division has become a core contributor to the bank's financial performance, driven by demand for corporate loans.

The bank also continues to play a significant role in supporting small and medium-sized enterprises (SMEs) across the UAE. The launch of Season 2 of the SME Souk podcast provides businesses with insights from market experts and success stories, further demonstrating the bank’s commitment to fostering growth in the SME sector. In addition, 99% of Rakbusiness loan applications were processed digitally, showcasing the bank’s ongoing digital transformation efforts.

Strong Credit Quality and Liquidity Position
RAKBANK’s portfolio credit quality remains robust, with a cost of risk of 1.6% as of September 2024, down from 2.5% in the prior year. The impaired loan ratio improved to 2.2%, down from 2.6% at the end of FY 2023, reflecting the bank’s strategic shift toward secured, low-risk assets.

The bank also maintained a strong liquidity position with an Eligible Liquid Asset Ratio of 15.0%, up from 13.0% at FY 2023, and an Advances to Stable Resources Ratio of 80.4%, down slightly from 82.1% at FY 2023. The bank’s Capital Adequacy Ratio (CAR) increased to 19.6%, highlighting its well-capitalized and resilient financial position.

Financial Performance in Q3 2024
RAKBANK’s strong performance extended into Q3 2024, with a profit before tax of AED 659 million, marking a 45.7% YoY increase. Operating income for the quarter reached AED 1.2 billion, up 7% YoY, while gross loans and advances increased by 12.1% compared to Q2 2024.

However, customer deposits decreased slightly by 2.1% compared to Q2 2024, primarily due to the maturation of high-cost time deposits during the quarter. Despite this, the bank's CASA ratio remains one of the highest in the industry at 62.4%, reaffirming the trust and confidence customers place in RAKBANK.

Outlook for Q4 2024
As the bank enters the final quarter of the year, Raheel Ahmed emphasized the importance of maintaining the current momentum. “We remain focused on executing our strategic goals while staying vigilant of global macroeconomic conditions. The UAE economy continues to show resilience, buoyed by stable oil prices, growth in the real estate sector, and a thriving trade and tourism industry. These positive trends position us well for continued success in the coming months.”

RAKBANK is committed to driving innovation, offering personalized solutions, and delivering sustained value to its shareholders. With a well-capitalized balance sheet and strong liquidity, the bank is well-prepared to navigate the challenges and opportunities that lie ahead.