RAKBANK Records AED 1.04 billion in Profit for the First Nine Months of 2012

RAKBANK, the leading retail and small business bank in the UAE, reported a net profit of AED 1.04 billion for the nine months ended 30th September 2012, recording 14.5% annual growth compared to the same period in 2011 and 7.6% quarter growth. End Quote

(1888PressRelease) February 08, 2013 - A jump of 14.5% compared to the same period last year RAKBANK, the leading retail and small business bank in the UAE, reported a net profit of AED 1.04 billion for the nine months ended 30th September 2012, recording 14.5% annual growth compared to the same period in 2011 and 7.6% quarter growth. The Bank continued to pursue a consistent and sustainable level of growth through a prudent lending strategy, while seeking new opportunities in the small business and personal finance segments.

Net interest income for the nine months increased by 14% to AED1.7 billion compared to the same period last year, and net loans and advances grew by 9.36%. With deposits up by 12.5% by AED 2.29 billion, the Bank was able to maintain healthy liquidity and loan to deposit ratios at 19.4% and 91.9% respectively.

"The positive results reported for the nine months reflect the continued growth in our customer base as a direct result of the Bank's full range of evolutionary products and services supported by superior customer service," said Graham Honeybill, RAKBANK's Chief Executive Officer. The recent replacement of RAKBANK's core banking system was another milestone in enhancing customers' experience by ensuring a faster, smoother, and more efficient service.

"The technology upgrade helps support the Bank's portfolio of e-solutions for customers and demonstrates the Bank's commitment to achieving excellence in customer service, which is the driving force behind RAKBANK's solid reputation and high levels of customer loyalty," said Honeybill. In addition to its Online and Mobile Banking services, RAKBANK's e-portfolio goes one step further to offer customers an online application process for customized insurance products from leading providers through www.rakbank.ae.

Due to the continuing investment in technology as well as branch and ATM networks, operating costs climbed by 13.7% compared to the same period last year. The total impairment charge for the nine months stood at AED 157.4 million against AED 223 million last year, and the total provisions held are considered conservatively adequate for the current loan portfolio.

Gross loans and advances increased by 9.36% to AED 20.4 billion during the nine months. Non-interest income at AED 489.7 million was down by 4% compared to the same period last year primarily because of the impact of regulatory restrictions on fees and charges imposed by the Central Bank since May 2011. However, RAKBANK's growth in investment income, foreign exchange, and other fee lines achieved a healthy growth of 18.9% in fee income compared to the third quarter of 2011.

"As a leading retail and small business bank, we are constantly looking for new ways to boost the Bank's capability to further grow our customer base and fee income. The introduction of Islamic Banking products and services planned for early 2013 will aim to capture a wider market by expanding the suite of RAKBANK offerings," added Honeybill.

Total assets increased by 8.1% to reach AED 26.49 billion by the end of the nine months with Moody's Investors Service affirming RAKBANK's stable outlook in September 2012. RAKBANK used its internal resources to fully settle the balance of subordinated debt of AED 684.47 million received from Ministry of Finance in December 2009.

Total Shareholder's equity was AED 5.33 billion at the end of the third quarter after distributing the 2011 cash dividend of AED 415.6 million in May 2012. The Bank's tier 1 and total ratio stands at 19.61% against the regulatory minimum of 12%. As a conservative measure, this ratio was calculated without taking into consideration the interim profit of AED1.04 billion.

RATINGS
The Bank enjoys the following ratings, which have remained unchanged since December 2011:

Rating Agency Deposits Financial Strength Outlook Support
Moody's Baa1 / P-2 D+ Stable -

Fitch BBB+ / F2 C Stable 2

Capital Intelligence A-/ A2 BBB+ Stable 2

About RAKBANK
RAKBANK, also known as the National Bank of Ras Al-Khaimah, is a leading retail and small to medium business bank in the UAE serving over 450,000 customers. Founded in 1976, the Bank is one of the country's oldest local financial institutions and today one of its fastest growing and most dynamic banks.

RAKBANK offers a wide range of personal and business banking services throughout its 32 branches, as well as its Telephone, Online, and Mobile banking channels. The Bank is a prominent player in small to medium enterprise finance and a leading provider of cards.

RAKBANK earned a reputation for extending one of the highest levels of customer service in the local industry by topping the annual Service Quality Bank Benchmarking Study, conducted by independent service specialists Ethos Consultancy, from 2005 to 2010.

For more information, please visit www.rakbank.ae or contact the Call Centre on +9714 213 0000. Alternatively, feel free to connect with RAKBANK via twitter.com/rakbanklive and facebook.com/rakbank.

For media queries, kindly contact Lamis Daoud on +9714 291 5064 or via lamis.daoud ( @ ) rakbank dot ae.

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