RAKBANK Credit Outlook Upgraded to Positive by Moody’s: Strong Performance and Growth Highlighted

RAKBANK has achieved a significant milestone in its transformation journey, with Moody’s Ratings upgrading its outlook from stable to positive. The agency reaffirmed the Bank’s Baa1 long-term deposit rating and Baa1 senior unsecured debt rating, marking the first shift in its rating outlook since Moody’s began evaluating RAKBANK in 2005.

Strengthened Profitability and Diversified Growth

Moody’s decision to enhance RAKBANK’s outlook reflects its improving profitability, stronger asset quality, and expanding Wholesale Banking division. These factors contribute to the Bank’s ability to drive sustainable and diversified earnings, positioning it for long-term stability and growth.

Key Financial Highlights

Moody’s report underscored several financial strengths that contributed to the outlook upgrade:

> Rising Profitability: The Bank’s well-balanced portfolio across retail, business, and wholesale banking has led to increased profitability. Wholesale banking and treasury operations now contribute over 25% of total operating income, reducing exposure to risk and enhancing financial stability.

> Improved Asset Quality: The non-performing loan (NPL) ratio has significantly declined to 2.2% in 2024, down from 2.8% in 2023 and a pandemic high of 5.5% in 2020.

> Strong Loan-Loss Reserves: The Bank maintains a coverage ratio of 253%, significantly surpassing the UAE banking sector average of 103%, ensuring a strong buffer against potential credit risks.

Robust Capital, Liquidity, and Government Support

Moody’s also highlighted RAKBANK’s solid capital position, strong liquidity buffers, and government backing. With Ras Al Khaimah holding a 53% ownership stake, the Bank benefits from substantial state support, reinforcing its financial resilience and market confidence.

Commenting on this milestone, Jaffer Nini, Group CFO of RAKBANK, said: "We are pleased with Moody’s decision to upgrade our outlook to positive, reflecting our continuous focus on sustainable growth, diversification, and innovation. Our shift towards Wholesale Banking and secured retail products has strengthened our financial position while maintaining our commitment to delivering exceptional customer experiences. This outlook change positions us well for a potential future rating upgrade as we further enhance our earnings quality and business resilience."