RAKBank has reported a robust performance for the first half of 2025, with profit after tax rising 26.1% year-on-year to AED 1.374 billion. The growth was driven by a strong surge in non-interest income, improved asset quality, and continued expansion of the bank’s balance sheet.

For the second quarter alone, the bank posted a profit after tax of AED 669 million, reflecting a 22% increase compared to Q2 2024.

Operating profit for the first six months reached AED 1.68 billion, a 7.7% increase year-on-year, supported by growth across both retail and wholesale banking segments. Total operating income stood at AED 2.6 billion, up 9.5% compared to the same period last year, while Q2 operating income rose 7.4% to AED 1.3 billion.

Operating expenses rose 12.9% as the bank continued investing in technology, data infrastructure, human capital, and customer experience. This led to a slight uptick in the cost-to-income ratio, which stood at 34.6% in H1 2025 versus 33.6% in H1 2024.

RAKBank’s total assets reached AED 95 billion as of June 2025, reflecting an 18.1% year-on-year growth. Gross loans and advances grew 17.4% to AED 51.3 billion, with wholesale banking loans expanding by 33%, in line with the bank’s strategic focus on portfolio diversification.

The bank’s current and savings account (CASA) base grew to AED 40.4 billion, a 12.2% increase, with the CASA ratio reaching 66%—among the highest in the UAE banking sector.

Improved Asset Quality and Capital Strength

Portfolio quality continued to improve, with the impaired loan ratio decreasing to 1.9% from 2.4% in H1 2024. Net impairment charges dropped sharply by 52.5% to AED 173 million. The ratio of net impairment charges to average loans and advances improved to 0.7%, down from 1.7% a year earlier.

Provision coverage remained strong, with the provisions-to-gross loans ratio at 5.2%, compared to 6.2% in H1 2024.

Return on equity (ROE) increased to 22.1%, up from 20.4%, while return on assets (ROA) rose to 3.1% from 2.9% in the same period last year. The bank also maintained a healthy capital position, with a capital adequacy ratio (CAR) of 18.8%, up from 18.0% in H1 2024.

Liquidity metrics remained solid, with an eligible liquid asset ratio at 15.1% and the lending-to-stable resources ratio (LSRR) at 80.7%.

Shift Towards Low-Risk, Diversified Income Base

RAKBank’s non-interest income grew by an impressive 35.6% year-on-year to AED 795 million. This increase was attributed to higher fee income, strong forex gains, and episodic gains from investment income, reflecting the bank’s ongoing efforts to diversify revenue streams.

Net interest income saw a modest increase of 0.8%, held back by a 100-basis-point rate cut in late 2024. However, on a risk-adjusted basis, the bank’s net interest margin improved by 37 basis points to 3.3%, up from 2.9% a year ago, as the bank strategically shifted towards secured, low-risk assets.

CEO Statement

Raheel Ahmed, Group CEO of RAKBank, commented:
“We have once again delivered strong growth in both our balance sheet and fee-based income. This reflects the strength of our diversified business model and disciplined execution. Our asset quality remains robust, with the cost of risk improving significantly. As the UAE continues to show solid economic fundamentals, we remain confident in our ability to sustain this momentum into the second half of 2025.”

However, he also noted caution over potential global headwinds:
“We remain vigilant amid geopolitical uncertainties and shifts in global monetary policy, which could impact margins. Nevertheless, our strategic positioning enables us to navigate these challenges effectively.”