RAKBank is latest UAE bank to cross 2023 with record profits - and with a strong loan book
Lending gains, especially to its core SME clients, fueled bank's solid gains
Dubai: A 10 per cent increases in overall loans and advances to Dh42 billion played its part in RAKBank becoming the latest UAE bank to see record profit for 2023. The entity closed the year with profit before tax of Dh1.8 billion, up by a substantial 54.6 per cent.
That in turn led to a net profit of Dh1.78 billion against 2022’s Dh1.16 billion. Total assets surged to Dh73.9 billion from dh66 billion.
The bank will continue to focus on what’s been working for it, says a top official. And that means being the go-to bank for SMEs.
“Being the leading SME bank in the UAE, we will continue to support entrepreneurs and small businesses,” said Raheel Ahmed, Group CEO. “We opened more than 10,000 accounts for startups and SMEs whilst providing them Dh2.2 billion in financing.”
On the top-line, RAKBank totaled Dh4.4 billion from Dh3.39 billion a year ago. UAE banks have been bringing out exceptional numbers on their 2023 performances, with a 'resilient' economy and fairly sustained demand from individuals and businesses for loans being the key drivers. Another positive was the fact that banks were, by and large, able to put a lid on their provisioning for bad loans. RAKBank's score on provisions were Dh1 billion, from Dh797 million in 2022.
Q4 numbers
During the October to December 2023 phase, customer deposits rose 4 per cent, which should be seen against the background of higher interest rate availability. Loans and advances in Q4-2 were higher by 22 per cent over Q3, ‘mainly on account of growth in the wholesale banking segment, up 6.9 per cent on the back of higher corporate loans’.
2024 chances
The bank is taking its cue from the healthy growth prospects for the UAE economy. The RAKBank Chairman Mohammad Omran Alshamsi says as much. “While the broader global environment will create headwinds, we have confidence in the strength of the UAE economy. The country continues to see string growth driven by key initiatives – ongoing economic diversification, progressive immigration policy, and reforms in business ownership, just to name a few.”