RAKBANK Posts Strong Results for 2012

Bank Net Profit Increases by 16.6% for the year. RAKBANK, the leading retail and small business bank in the UAE, announced AED1,402.8 million net profit for 2012, an increase of 16.6% over 2011. End Quote

(1888PressRelease) February 20, 2013 - The Bank continues to report double digit growth year on year by consistently pursuing the Bank's successful strategy towards the business and personal finance segments.

"2012 marks a very successful year for RAKBANK," said Graham Honeybill, RAKBANK's Chief Executive Officer. "Not only did it see the Bank's implementation of its revamped core banking system, but 2012 also witnessed the preparations for the launch of RAKBANK's Islamic Banking window." With these achievements and many others, it is no surprise that RAKBANK was voted Bank of the Year in 2012 by an independent jury during the Arabian Business Achievement Awards.

In review, the Bank's net interest income increased in 2012 by 12.5% over 2011 to AED 2,233 million. This was mainly a result of a 10.4% growth in loans and advances, which stood at AED 20.3 billion for the year. Fee income for 2012 exceeded 2011 levels despite the tariff restrictions imposed by the UAE Central Bank in May 2011, with total revenues climbing by 9.7% to AED 2.9 billion.

Meanwhile, credit losses were 30% lower than 2011 as the Bank continued to apply a conservative strategy to loan underwriting and provisioning. Consequently, non-performing loans remained steady, at a rate of 2.5% of gross loans. Deposits grew by 13.3% to AED 20.7 billion which, along with retained profits, was sufficient to support the growth in loans, investments and the repayment of the AED 684 million in debt to the Ministry of Finance.

Operating costs increased by 13% as RAKBANK expanded its branch and ATM network throughout 2012 by adding a branch in Sharjah, another in Abu Dhabi, and over 50 ATMs around the country. The Bank also launched 3 dedicated SME banking centres to ensure a convenient banking presence where small and medium sized companies are located.
In the meantime, the Bank continued to invest in online media channels including Online Banking, Mobile Banking, and RAKBANK Direct and RAKBANK Deals on www.rakbank.ae.

Besides its online innovations, RAKBANK is committed to taking advantage of opportunities in the marketplace that grow its customer base. The Bank recently introduced Islamic Banking services through a separate brand, RAKBANK AMAL, to take advantage of the growing local demand for Islamic finance. "RAKBANK is aligning itself with the country's efforts to be at the forefront of Islamic Finance by bringing its trendsetting products, online solutions, and award-winning customer service into the local Islamic Banking market."

Finally, the regulatory liquidity ratio at year end was 20% compared to 19% by end of 2011. RAKBANK is well positioned to comply with the new liquidity rules as and when they become effective. The Bank's Tier 1 ratio as per Basel II is 28.78% as against the requirement of 12% set by the UAE Central bank and this level of capital provides the Bank ample room for growth during 2013.

Ratings

The bank is currently rated by the following leading rating agencies. Their recent ratings have remained unchanged as follows:

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

Dividend
The Directors have recommended a stock dividend of 10% and a cash dividend of 40%. The dividend recommended will result in over 56% of the net profit being retained, thereby increasing capital and reserves to strengthen the Bank's overall position and provide support for future growth.

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 700,000 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, as well as Islamic Banking solutions via RAKBANK AMAL, throughout its 33 branches, and its Telephone, Online, and Mobile banking channels. A prominent player in small to medium enterprise finance and a leading provider of credit cards, the Bank receiving the title of 'Bank of the Year' in 2012 by Arabian Business Achievement Awards.

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, you can 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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