RAKBank Achieves Record Profit
RAKBank has announced a record net profit after tax of AED 1.1 billion for the first half of 2024, marking a substantial 21% increase compared to the same period last year. The bank’s overall income surged to AED 2.3 billion, up 87%, with deposits reaching AED 58.5 billion, a 19.4% increase.
Competitive Banking Landscape
The bank’s CEO, Raheel Ahmed, attributes the strong performance to sustained lending to businesses despite heightened interest rate discussions and increased competition among UAE banks. “The competitive environment has led to margin compression, with banks offering loans at lower rates to attract customers,” Ahmed stated. RAKBank’s margins have adjusted to 4.5-4.6% from a previous peak of 4.9%.
Growth in SME Sector
RAKBank’s commitment to the SME sector is evident, with approximately 10,000 new SME accounts opened in the first half of 2024. Notably, 56% of these are new startups. The bank has also seen robust credit quality, with a cost of risk decreasing to 1.7% from 2.6% in the previous year.
Strategic Focus and Future Outlook
Looking ahead, RAKBank remains focused on domestic operations and technology modernization rather than seeking international expansion. The bank plans to continue enhancing its technological infrastructure to stay competitive.
Geopolitical and Economic Factors
As the second half of 2024 progresses, RAKBank will monitor global geopolitical dynamics, including elections and military conflicts, which could impact regional economies. Despite these uncertainties, the bank is optimistic about the UAE’s resilient economy, supported by strong sectors such as oil, real estate, trade, and tourism.
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