RAKBANK posted a sharp rise in first-quarter profit, reporting net earnings of AED 1.01 billion for the three months to 31 March, up 43% from AED 704.5 million a year earlier, as strong lending and deposit growth combined with a one-off gain from the sale of its merchant acquiring business. The result translated to about $274.3 million and marked the bank’s strongest quarterly bottom line on record.
The earnings jump was helped materially by a gain of AED 473 million booked from the disposal of that payments business, sold to Network International under a transaction completed in March after regulatory approvals. The bank’s filings show deferred consideration of AED 137 million linked to the deal, while the broader sale value was put at AED 551 million. That strategic move gave the quarter a sizeable lift and also underlined how lenders in the Gulf are reworking portfolios to focus on core banking and fee-rich distribution partnerships rather than owning every payments rail themselves.
Even stripping out the exceptional gain, the numbers point to an institution still expanding on a healthy base. Operating profit before impairment charges and tax climbed to AED 1.34 billion from AED 865.9 million a year earlier, while operating income rose to AED 1.30 billion from AED 1.17 billion. Net interest income and income from Islamic financing increased as the bank continued to benefit from loan growth, resilient spreads and a funding profile anchored by low-cost current and savings balances. RAKBANK said its net interest margin stood at 4.0%, while the CASA ratio reached 65.6%, both strong markers in a market where funding costs remain a decisive competitive factor.
Balance-sheet expansion remained a central part of the story. Total assets stood at AED 107.3 billion at the end of March, up from AED 105.0 billion at the end of December and 18% higher than a year earlier. Customer deposits climbed to AED 74.3 billion from AED 70.5 billion at the close of 2025, while loans and advances net of provisions rose to AED 55.4 billion from AED 53.2 billion. That combination suggests the bank is still capturing business across retail, business banking and wholesale segments at a time when the UAE economy continues to support credit demand, particularly among small and medium-sized enterprises and consumer borrowers.
Asset quality also improved, giving management room to argue that growth has not come at the expense of underwriting discipline. The impaired loans ratio eased to 1.9% from 2.4% a year earlier, while provision coverage reached 277%. Capital adequacy stood at 18.7%, comfortably above regulatory thresholds, and the bank said its eligible liquid assets ratio was 17.7%. Those metrics matter more than usual because banks across the region have had to navigate geopolitical stress, tighter compliance expectations and the need to preserve confidence while still extending credit.
Profitability ratios strengthened accordingly. Return on common equity rose to 29.9% from 22.4% a year earlier, and return on assets climbed to 3.9% from 3.2%. Earnings per share increased to AED 0.50 from AED 0.35. These are standout levels for a mid-sized lender and they are likely to reinforce investor attention on institutions that can pair retail franchise depth with disciplined balance-sheet management. At the same time, the quarter’s headline strength will inevitably be read with caution because part of the leap came from a disposal gain that will not repeat in the same form.
That leaves the market focusing on the underlying engine of the business. RAKBANK’s interest income from wholesale banking loans, business banking loans, mortgages, cards and investment securities all moved higher in the quarter, showing that revenue generation was broad-based rather than dependent on a single book. Yet impairment charges also increased to nearly AED 238 million from AED 93.7 million a year earlier, a reminder that expansion in a volatile regional environment still carries risks and that lenders must continue to price credit conservatively.
The earnings jump was helped materially by a gain of AED 473 million booked from the disposal of that payments business, sold to Network International under a transaction completed in March after regulatory approvals. The bank’s filings show deferred consideration of AED 137 million linked to the deal, while the broader sale value was put at AED 551 million. That strategic move gave the quarter a sizeable lift and also underlined how lenders in the Gulf are reworking portfolios to focus on core banking and fee-rich distribution partnerships rather than owning every payments rail themselves.
Even stripping out the exceptional gain, the numbers point to an institution still expanding on a healthy base. Operating profit before impairment charges and tax climbed to AED 1.34 billion from AED 865.9 million a year earlier, while operating income rose to AED 1.30 billion from AED 1.17 billion. Net interest income and income from Islamic financing increased as the bank continued to benefit from loan growth, resilient spreads and a funding profile anchored by low-cost current and savings balances. RAKBANK said its net interest margin stood at 4.0%, while the CASA ratio reached 65.6%, both strong markers in a market where funding costs remain a decisive competitive factor.
Balance-sheet expansion remained a central part of the story. Total assets stood at AED 107.3 billion at the end of March, up from AED 105.0 billion at the end of December and 18% higher than a year earlier. Customer deposits climbed to AED 74.3 billion from AED 70.5 billion at the close of 2025, while loans and advances net of provisions rose to AED 55.4 billion from AED 53.2 billion. That combination suggests the bank is still capturing business across retail, business banking and wholesale segments at a time when the UAE economy continues to support credit demand, particularly among small and medium-sized enterprises and consumer borrowers.
Asset quality also improved, giving management room to argue that growth has not come at the expense of underwriting discipline. The impaired loans ratio eased to 1.9% from 2.4% a year earlier, while provision coverage reached 277%. Capital adequacy stood at 18.7%, comfortably above regulatory thresholds, and the bank said its eligible liquid assets ratio was 17.7%. Those metrics matter more than usual because banks across the region have had to navigate geopolitical stress, tighter compliance expectations and the need to preserve confidence while still extending credit.
Profitability ratios strengthened accordingly. Return on common equity rose to 29.9% from 22.4% a year earlier, and return on assets climbed to 3.9% from 3.2%. Earnings per share increased to AED 0.50 from AED 0.35. These are standout levels for a mid-sized lender and they are likely to reinforce investor attention on institutions that can pair retail franchise depth with disciplined balance-sheet management. At the same time, the quarter’s headline strength will inevitably be read with caution because part of the leap came from a disposal gain that will not repeat in the same form.
That leaves the market focusing on the underlying engine of the business. RAKBANK’s interest income from wholesale banking loans, business banking loans, mortgages, cards and investment securities all moved higher in the quarter, showing that revenue generation was broad-based rather than dependent on a single book. Yet impairment charges also increased to nearly AED 238 million from AED 93.7 million a year earlier, a reminder that expansion in a volatile regional environment still carries risks and that lenders must continue to price credit conservatively.
Topics
UAE