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RAKBANK more than doubles its quarterly Net Profit at AED 450M for Q1’23

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3 years ago

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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.

Raheel Ahmed – CEO of RAKBANK

  • 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

 

 

 

Financial Highlights for Q1 2023

Income Statement Highlights Quarter Results Variance
(AED Mn) Q1’23 Q4’22 Q1’22 Q1’23 Q1’23
vs Q1’22 vs Q4’22
Net Interest Income and net income from Islamic financing 788.8 733.1 540.4 46.0% 7.6%
Non-Interest Income 284.4 261.6 186.5 52.5% 8.7%
Total Income 1,073.2 994.8 726.9 47.6% 7.9%
Operating Expenditures (389.0) (371.4) (372.4) (4.5%) (4.7%)
Operating Profit Before Provisions for Impairment 684.2 623.3 354.6 93.0% 9.8%
Provisions for Impairment (233.9) (338.7) (134.5) (73.9%) 30.9%
Net Profit 450.3 284.6 220.1 104.6% 58.2%

 

Balance Sheet Highlights Results as at Variance
(AED Bn) Mar’23 Dec’22 Mar’22 Q1’23 Q1’23
vs Q1’22 vs Q4’22
Total Assets 68.9 66.4 60.0 14.8% 3.8%
Gross Loans & Advances 38.7 38.1 37.2 4.1% 1.4%
Deposits 46.4 44.9 39.8 16.4% 3.3%
Key Ratios Quarter Ratios Variance
Percentage Mar’23 Dec’22 Mar’22 Q1’23 Q1’23
vs Q1’22 vs Q4’22
Return on Equity* 19.4% 12.5% 10.5% 8.9% 6.9%
Return on Assets* 2.8% 1.7% 1.5% 1.3% 1.1%
Net Interest Margin* 4.9% 4.5% 3.8% 1.1% 0.4%
Cost to Income 36.2% 37.3% 51.2% 15.0% 1.1%
Impaired Loan Ratio 3.0% 3.0% 3.6% 0.6% 0.0%
Impaired Loan Coverage Ratio 192.1% 181.7% 137.8% 54.3% 10.4%
Total Capital Adequacy Ratio Basel III** 16.8% 16.4% 16.5% 0.3% 0.4%
* Annualized
**After application of Prudential Filter

 

Profitability Growth supported by Income momentum and improvement in Provisions

  • Net Profit increased by 104.6% to 450.3M (vs Q1’22 104.6% and Q4’22 58.2%).
  • Net Interest Income and Income from Islamic products net of distribution to depositors increased by 46.0% to AED 788.8M (vs Q4’22 7.6%).
  • Interest income from conventional loans and investments increased by 79.7%, while interest costs on conventional deposits and borrowings increased by 300.5%. Net income from Sharia-compliant Islamic financing increased by 7.8%.
  • Non-Interest Income increased by 52.5% to AED 284.8M (vs Q1’22 52.5% and Q4’22 8.7%), primarily due to forex and derivative income booked in Q1 2023.
  • Total Income increased by 47.6% (vs Q4’22 7.9%), benefiting from the balance sheet growth momentum.
  • Operating Expenditure was AED 389.0M (vs Q1’22 AED 372.4M), reflecting a 4.5% increase compared to the same period in 2022, and a 4.7% increase compared to Q4 2022, due to the Bank’s growth investments.
  • Operating Expenses increased mainly due to higher staff costs, card expenses, and other operating expenses. However, these were partly offset by lower IT expenses, occupancy costs, depreciation, and communication expenses.
  • Cost-to-Income ratio for the bank decreased to 36.2% (vs Q1’22 51.2% and Q4’22 37.3%).
  • Provision for credit loss increased by 73.9% to AED 233.9M for Q1 2023 compared to Q1 2022, due to prudent precautionary measures in anticipation of expected developments. However, compared to Q4 2022, the provision for credit loss decreased by 30.9% for Q1 2023.
  • Net Credit Losses to average loans and advances closed at 2.5% (vs Q4’22 3.4%).

 

Balance Sheet crosses AED 68.9B with a strong uptick across all customer segments.

  • Balance sheet crosses AED 68.9B as the Total Assets increased by AED 2.5B compared to 31 December 2022, reflecting a growth of 3.8%, with an increase in Cash/Central Bank balances by AED 929.2M, Investments by AED 805.8M, Gross Loans and Advances by AED 551.9M and Lending to Banks by AED 480.3M as compared to 31 December 2022.
  • Business Banking portfolio increased by AED 264M, Retail Banking by AED 286.2M and Wholesale Banking segment (including bank lending) increased by AED 211M compared to 31 December 2022.
  • Business Banking recorded 2.9% growth compared to 31 December 2022 with Business Loans growing by 5.3% and an increase of 1.5% on the Trade and Working Capital Loans portfolio.
  • Retail Banking reflected a growth of AED 286.2 M supported by a strong sales momentum across products with Mortgages growing by 4.8% and Auto Loans by 6.4%.
  • Non-performing Loans and Advances to Gross Loans and Advances ratio remained same at 3.0% as at 31 March 2023 compared to 31 December 2022.

 

Robust Growth in Customer Deposits as we continue to be the main bank for most of our customers

  • Q1’23 Customer deposits increased by 3.3% compared to 31 December 2022, mainly due to an increase of AED 1,089.5M in CASA deposits and AED 404.7M in time deposits, endorsing the trust our customers place in RAKBANK’s solutions and services. RAKBANK has built a strong CASA franchise with a CASA ratio of 70.5 % as at 31 March 2023.

Strong Capital and Liquidity position

  • The Bank’s Capital and Liquidity ratios remained strong.
  • With a Total Capital Ratio as per Basel III, after the application of prudential filter, at 16.8% compared to 16.4% at the end of 2022.
  • The regulatory eligible liquid asset ratio at the end of 31 March 2023 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.

 

Healthy Cash Flows from operating activities

  • Cash and cash equivalent as at 31 March 2023 were AED 4.7B compared to AED 4.3B as at 31 December 2022.
  • Net cash generated from operating activities was AED 1.2B, AED 819.8M was used in investing activities and AED 4.7M used in financing activities.

Impact of Projected Capital Expenditure and Development

  • The Group incurred AED 37.3M in capital expenditure in Q1 2023.
  • RAKBANK will carry on advancing its investment towards customer-centric technology transformation.

Ratings

RAKBANK gets continuously rated by leading rating agencies with their latest ratings shown in the table below. This rating reflects the institutional strength of the Bank that is backed up by trust and transparency in financial reporting.

 
Rating Agency Last Update Deposits Outlook
Moody’s November 2022 Baa1 / P-2 Stable
Fitch April 2023 BBB+ / F2 Stable
Capital Intelligence August 2022    A- / A2 Positive

 

 

 

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Financial

Al Ansari Exchange and Dubai Municipality mark decade-long partnership as annual collections rise 710%

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8 hours ago

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August 18, 2026

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Al Ansari Exchange, the UAE’s leading remittance and foreign exchange company and a subsidiary of Al Ansari Financial Services PJSC (DFM: ALANSARI), and Dubai Municipality are celebrating a decade-long partnership that has enhanced access to government payment services, with annual collections rising by approximately 710% over the course of 10 years.

Established in 2016, the partnership enables individual and corporate customers to pay for Dubai Municipality services through Al Ansari’s extensive branch network across the UAE, expanding the availability of government services.

This growth reflects strong customer adoption, the service’s operational reliability, and rising demand for convenient payment channels. The collaboration also supports Dubai’s vision for customer-centric, digitally enabled government services by connecting public services with trusted private-sector payment infrastructure.

Marking the tenth anniversary of the partnership, Sayed Ismail Al Hashemi, Acting CEO of the Corporate Support Services Sector at Dubai Municipality, said: “We highly value our decade-long partnership with Al Ansari Exchange. This collaboration has contributed to enhancing service delivery efficiency and simplifying the customer journey for the payment of Dubai Municipality fees.”

Al Hashemi added: “The partnership has had a tangible impact by improving payment collection efficiency and expanding the range of available payment channels, making our services more accessible and enhancing customer satisfaction. At Dubai Municipality, we remain committed to leveraging digital transformation to deliver smart and efficient services that enhance the quality of life and wellbeing of our customers.”

Rashed A. Al Ansari, Group Chief Executive Officer of Al Ansari Financial Services, added: “Our ten-year partnership with Dubai Municipality reflects a shared commitment to making essential services more convenient and accessible. Over the past decade, we have combined Dubai Municipality’s service excellence with our extensive network and payment capabilities to provide customers with a reliable and efficient channel for completing their transactions. We look forward to building on this strong foundation and continuing to support Dubai’s evolving smart service ecosystem.”

Building on these foundations, both organisations will explore new opportunities to strengthen the partnership and support the continued evolution of Dubai’s smart service ecosystem.

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Financial

UAE energy firms risk forfeiting millions in R&D credits unless spend is qualified and pre-approved

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1 month ago

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July 15, 2026

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From enhanced carbon capture at gas processing plants to grid modernisation and renewable energy storage, the technology reshaping the UAE’s oil and gas industry, has acquired a new dimension. As of the 2026, a significant portion of the research and development (R&D) behind it can be converted into a corporate tax credit of up to 50 percent under the country’s first dedicated R&D Tax Credit regime. According to Dhruva, a Ryan Affiliate, the opportunity for the energy sector is substantial, but the design of the regime rewards companies that act early and penalises those that treat it as a year-end exercise.

The regime was established by Cabinet Decision No. 215 of 2025 and made operational by Ministerial Decision No. 24 of 2026, issued on 18 March 2026. It applies to tax periods and fiscal years beginning on or after 1 January 2026, with the first claims expected in 2027. Credits are calculated on a tiered basis, rising from 15 percent to a headline 50 percent. Qualifying expenditure is capped at AED 5 million per qualifying entity or tax group per year, which produces a maximum credit of AED 2 million.

“The UAE’s energy transition has been told as a sustainability story and an investment story. From this year it is also a tax story. The work being undertaken to decarbonise hydrocarbon production, including enhanced oil recovery, carbon capture and storage, methane abatement, and the development of digital twins for processing plants, exemplifies the systematic, uncertainty-driven R&D that this regime is designed to reward. The catch is that the value sits in the documentation, and the documentation has to be built in real time. You cannot retrospectively reconstruct a year’s worth of R&D evidence in 2027,” said Nimish Goel, Leader, Middle East, Dhruva, Ryan LLC Affiliate.

For an industry as engineering-intensive as oil and gas, the central question is not whether qualifying activity exists. It is whether companies can tell the difference between routine engineering and genuine R&D, and prove it. Applying an established recovery method to a new reservoir does not, in itself, qualify. By contrast, systematically resolving technical uncertainty, whether relating to reservoir behaviour, materials performance under high-pressure conditions, the capture of CO₂ from sulphur recovery flue gas, or the integration of new digital control systems,  may qualify, provided the systematic experimentation and its outcomes are documented as the work is carried out.

“Two features will catch international energy companies off guard. Only R&D performed inside the UAE qualifies, and subcontracted R&D counts only when it is carried out by UAE-based third parties. Much of the sector’s historical R&D has run through global technology centres and group affiliates abroad. Companies will need to look hard at where their R&D actually physically takes place, before they assume they qualify,” said Fran Wilhelm, Associate Partner, Dhruva, Ryan LLC Affiliate.

The regime’s defining feature is a dual threshold that links the credit rate to both qualifying spend and headcount. The first AED 1 million of qualifying spend earns 15 percent and requires at least two R&D staff on average; spend between AED 1 million and AED 2 million earns 35 percent and requires at least six; and spend between AED 2 million and AED 5 million earns the top 50 percent rate and requires at least fourteen. Both conditions must be met for each band. Where the headcount falls short, the claim drops back to the highest band where both the spend and the staffing tests are satisfied. A minimum of AED 500,000 of qualifying expenditure applies to each R&D project.

This is where oil and gas companies face a structural choice that other sectors may not. R&D in the industry is often capital-intensive rather than people-intensive: a single carbon capture or enhanced oil recovery pilot can absorb millions in equipment and consumables while employing only a handful of dedicated researchers. Under the dual threshold, that profile caps the credit at the lowest band regardless of how much is spent. Reaching the higher rates means building R&D headcount physically in the UAE.

Pre-approval from the Emirates Research and Development Council is mandatory before any credit can be claimed, with no exceptions. No pre-approval means no credit, however strong the underlying scientific or technological uncertainty. Businesses must keep detailed technical records of objectives, methods, experiments and outcomes for at least seven years. The credit is also currently non-refundable, so it benefits companies that have a corporate tax or top-up tax liability to offset, which describes most established producers and service contractors in the sector. That said, it has been suggested that Phase 2 may include a refundable credit and an increase in both application and generosity, meaning all businesses should start planning ahead, irrespective of their tax position.

“Companies that map their qualifying projects now, secure pre-approval and build the evidence trail through the 2026 financial year will capture real value when claims open in 2027. Those that wait will find that the spend was eligible but the proof was never created. In this regime, the documentation is the asset,” concluded Nimish Goel.

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Financial

QASHIO BRINGS CUSTOMERS EXCLUSIVE ACCESS TO THE FIFA WORLD CUP 2026™ FAN ZONE EXPERIENCE

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1 month ago

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July 9, 2026

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Qashio, the MENA region’s leading spend management solution, is rewarding its UAE customers with exclusive FIFA World Cup 2026™ fan experiences, including premium viewing access, interactive competitions, and hospitality benefits at Emirates Golf Club’s Footy Central in Dubai. The initiative gives customers the opportunity to experience a dedicated football watch party destination during the world’s biggest football tournament.

Running from 11 June to 19 July 2026, Footy Central will screen live matches alongside themed F&B, interactive games, family-friendly activities, competitions, and matchday entertainment. The programme builds on the global appeal of football’s premier event, which reached more than five billion viewers across all platforms during its previous edition, and reflects Qashio’s value proposition beyond spend management by turning client loyalty into tangible rewards and premium benefits.

The campaign will unlock exclusive access to selected matchday rewards and fan activations for Qashio customers, including F&B vouchers, matchday credits, Viya Points, gaming rewards, and VIP hospitality experiences. Viya Points, the digital reward currency within the Viya App ecosystem, can be redeemed across a premium lifestyle network of 400 venues, extending the value of the campaign beyond the matchday.

Guests can participate in the Ronaldo Header Challenge, where they can test their heading accuracy, while the FIFA Console Zone will host the PS5 FIFA Esports Challenge: Road to the Cup, with guests competing in head-to-head matches for leaderboard positions and daily rewards. Half-time engagement will include lucky draws during key matches, alongside Predict & Win competitions that reward guests for accurate match predictions.

Armin Moradi, CEO and Founder of Qashio, said: “Football is the most popular sport in the UAE among both Emiratis and the broader expat population, which makes the FIFA World Cup 2026™ a powerful moment to celebrate with our customers. Qashio was built to help businesses manage spend with more control and value, and this campaign extends that promise by turning loyalty into memorable experiences for finance leaders and teams across the country.”*

The FIFA World Cup 2026™ customer rewards campaign reflects Qashio’s broader approach to building a spend management platform that combines financial control with meaningful customer engagement. Through rewards, activations, competitions, and hospitality benefits, Qashio is continuing to create value for businesses beyond transactions, while giving customers new ways to engage with one of the most anticipated sporting events in the world.

For more information on the Footy Central experience and partnership opportunities, visit the link.

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