On Monday, RAKBank announced a record net profit after tax of Dh1.1 billion, marking a 21 percent year-on-year increase, fueled by diversified growth in its balance sheet, sustained sales momentum, and robust credit quality. The bank's statement highlighted an 8.7 percent YoY rise in income, bolstered by a net interest margin of 4.6 percent, due to well-diversified asset growth and a stable CASA base, complemented by increased Foreign Exchange & Investment income. Operating expenses reached Dh789 million, showing a 3 percent YoY growth, as the bank continues to expand its business and invest in technology and talent sustainably, according to the statement.
"Our strategic transformation is on track, and we are making significant strides towards becoming the 'digital bank with a human touch'. This transformation is clearly reflected in our outstanding financial results for H1 2024," said Raheel Ahmed, Group CEO of RAKBank. The bank plans to further diversify its balance sheet, lower its risk profile, and introduce new innovative products and services for its customers. Ahmed also noted that the bank remains well-capitalized and continues to deliver strong shareholder returns.
RAKBank has made substantial progress in improving customer accessibility, with digital banking platforms being accessed 24 million times in H1 2024, a 13 percent YoY increase. In personal banking, 98 percent of transactions were digital. Since the introduction of digital onboarding, 83 percent of personal banking accounts and 49 percent of new bank cards are now initiated digitally. Ahmed expressed particular satisfaction with the cultural transformation progress, empowering employees to enhance customer experience.
RAKBank has also become the first in the region to issue a social bond, a significant milestone that underscores its commitment to supporting SMEs and the UAE’s economy. The bond proceeds will aid the healthcare sector and provide loans to Micro, Small & Medium Enterprises, aligning with the "We the UAE 2031" vision. As the bank looks ahead to the second half of 2024, Ahmed remains confident, despite global political and economic challenges, due to the UAE's resilient economy supported by oil prices, real estate, trade, and tourism.
Gross loans and advances reached Dh43.7 billion, a 9.4 percent YoY increase, driven by growth across all segments, including a 19.4 percent rise in wholesale banking loans. Customer deposits surged 19.4 percent to Dh58.5 billion YoY, with a CASA ratio of 61.6 percent. Credit quality remained strong with a cost of risk at 1.7 percent, and total provisions coverage on gross loans & advances increased to 6.1 percent. Shareholder returns were robust, with a Return on Equity (ROE) of 20.4 percent and Return on Assets (ROA) of 2.9 percent. The bank maintains high liquidity and capital adequacy with a Capital Adequacy Ratio (CAR) at 18 percent.
