Home Banking & Finance RAKBANK announces quarterly Net Profit at AED 450 million for Q1’23

RAKBANK announces quarterly Net Profit at AED 450 million for Q1’23

Raheel Ahmed, CEO, RAKBANK

RAKBANK delivered a Net Profit increase of 105% for Q1 2023 driven by a robust and diversified growth on both sides of the balance sheet. This was underpinned by strong sales momentum and lower cost of funds.

  • Total Income performance was supported by a strong net interest income of AED 788.8M, up 46.0% YoY. Net interest margins increased to 4.9% against 3.8% (Q1’22) and continues to be among the highest in the Industry. Q1’23 non-interest income of AED 284.4M, up 52.5% YoY. The growth in non-interest income was driven by higher forex and derivative income.
  • Gross loans & advances at AED 38.7B, reflecting a 1.4% increase compared to 31 December 2022 on the back of a changing balance sheet mix in line with the strategic direction of the bank.
  • Customer deposits stood at AED 46.4B, an increase of 3.3% compared to 31 December 2022. The Bank has a strong Current & Saving Account (CASA) franchise with the CASA ratio of 70.5%.
  • Cost of Risk remained low due to the Bank’s diverse business mix and resilient UAE economic environment, leading to a 30.9% reduction in impairments as against Q4’22. Impaired Loan provision coverage ratio increased to 192.1% against 137.8% in Q1’22, remaining one of the strongest in the industry.

The Bank achieved balanced growth across all Business Segments:

Personal Banking:

  • Gross loans & advances at AED 19.1B are up 1% YoY and +2% against FY’22 driven by the sales momentum across products with balance sheet for Auto loans +6%, Mortgages +5% and Personal loans +0.3%.
  • Customer deposits of AED 16.7B, are up 22% YoY and +6% during the quarter driven by higher Term deposits +30% & CASA +0.3%.
  • Q1’23 income supported by net interest income of AED 229M, +19.0% YoY and non-interest income of AED 123M, +1% YoY.

Business Banking:

  • Gross loans & advances of AED 9.3B, are up 12% YoY and +3% against FY’22 mainly through higher volumes for Rak business loans +5%.
  • Customer deposits of AED 19.7B, are up 14% YoY and +7% during the quarter driven by higher CASA deposits +7% & Term deposits +2.7%.
  • Q1’23 income supported by net interest income of AED 337M, +57.0% YoY and non-interest income of AED 77M +6% YoY.

Wholesale Banking & Others:

  • Gross assets (including lending to banks) of AED 19.8B, are up 13% YoY and +1% against FY’22 mainly driven by higher FI bank lending +2%.
  • Customer deposits of AED 9.9B, are up 13% YoY and +7% during the quarter.
  • Q1’23 income supported by net interest income of AED 224M, +68.0% YoY and non-interest income of AED 84M against a loss of 8Mn in Q1’22.

RAKBANK delivered strong shareholder returns with ROE of 19.4% and ROA of 2.8%, and remained highly liquid and well capitalized. 

  • The Bank’s Capital Adequacy Ratio (CAR) was at 16.8%.
  • The regulatory eligible liquid asset ratio at 14.8%, compared to 12.8% as at 31 December 2022, and the advances to stable resources ratio stood comfortably at 81.8% compared to 79.7% at the end of 2022.
  • Cost-income ratio improved to 36.2% driven by strong cost discipline, automation and digitization.
  • The Bank’s non-performing loans ratio improved to 3.0% against 3.6% in Q1’22.

Raheel Ahmed, CEO of RAKBANK said, Delivering on our multi-year strategy, we accelerated our growth and achieved a record net profit of AED 450M and a record total income of AED 1,073M for the quarter. In addition to this impressive growth, I am very pleased with the progress we are making in laying the foundation for sustainable growth.

In diversifying our income sources, we achieved robust growth on both sides of the balance sheet, across interest and fee incomes, and in all our segments. In terms of building deeper customer relationships, we achieved strong growth in digitally active customers with digital transactions growing by 12% YoY. Our high CASA ratio in our deposit base of 70.5% despite the high interest rate environment is a testament of the strong relationships we built with our customers and clients. We enhanced our operational leverage and improved our cost-income ratio through our strong cost discipline, and our cost of risk reduced via diversifying our business mix. The Bank remains well capitalized and liquid with a Capital Adequacy Ratio of 16.8% and an Eligible Liquid Asset Ratio of 14.8%. As a result of our progress, we achieved an ROE of 19.4% and ROA of 2.8%.

Being one of the largest SME banks in the UAE, we continue to back entrepreneurs and start-ups by opening more than 4,000 business accounts in Q1 2023, of which 1,600 accounts were opened for start-ups. Similarly, we disbursed AED 571M in business loans, out of which AED 394M were disbursed for new business loan customers.

As we grow, we are investing heavily in technology while maintaining cost discipline to digitize customer journeys, upgrade core data architecture, and revamp compliance and risk infrastructure. This investment will enable RAKBANK’s journey to provide a superior customer experience that is characterized by its hyper-personalization and relevance. The recent launch of our first fully digital accounts opening capability with straight-through processing is a good example of how we are digitizing our customer journeys.

Continuing from Q4 2022, we are focusing on expanding strategic hires to lead our growth, and we remain committed to and supporting the career aspirations and ambitions of our colleagues. Special attention is drawn to developing our Emirati talents as we align ourselves to the UAE leadership’s mission of growing and nurturing local talent.

As one of the nation’s leading financial institutions, RAKBANK recognizes our responsibility to support the ‘UAE Net Zero by 2050’ initiative. The team is actively engaged with RAK Government on COP28 submissions, working on financial inclusion and reducing emissions. We continue to support financial inclusion and accelerate digital remittances through our wages protection system partner and the United Nations Capital Development Fund.

Lastly, our outlook for FY 2023 remains positive yet cautious, with the buoyant UAE economy and uncertain global macro set up as backdrops. While we closely monitor the headwinds of inflation, rising interest rates, geopolitical developments, we will continue building on the Bank’s strengths and remain committed to delivering on our strategy.”

Digital Transactions


+12% YoY

Card Spends

+24% YoY

Payment through our rails (In/Out)
+9% YoY


Digitally Active Customers

+15% YoY