National Bank of Ras Al Khaimah (Rakbank) reported a 31.7 per cent year-on year rise in its first-quarter net income on the back of a rise in operating profit and a fall in impairment charges for bad loans. Consolidated net profit for the first three months of the year climbed to Dh270.2 million, the lender said in statement on Wednesday to the Abu Dhabi Securities Exchange, where its shares are listed. On a year-on-year basis, total operating income surged by Dh78.4m to reach Dh1 billion at the end of the first quarter, mainly driven by an increase in non-interest income by Dh27.7m, which was partly offset by a Dh19m drop in overall net interest income, the lender added. Interest income from conventional loans and investments, however, rose by 9.3 per cent from a year earlier. “This is a clear outcome of the bank’s diversification strategy, which commenced four years ago and is now delivering solid results,” said Peter England, Rakbank chief executive. “Non-interest income particularly was very strong for the first quarter rising to Dh317m which is an all-time high, and was achieved by impressive results across all business lines.” The bank said its diversification strategy has also helped provisions for bad loans to fall by 5 per cent year-on-year. Provisions for credit loss decreased by Dh17.9m, mainly due to a drop in loans losses in the lender’s business banking portfolio. Cost-to-income for the reporting period remained stable at 38.4, the bank said. Earlier this month, Rakbank completed the sale of a $500m (Dh1.84bn) US dollar-denominated bond as the lender looks to pay maturing debt and pursue its growth plans. The five-year bond, pays an annual interest of 4.125 per cent, equivalent to 185 basis points over five-year mid swaps, a benchmark of pricing, it said at the time. The lender, rated Baa1 by Moody's Investors Service and BBB+ by Fitch Ratings with stable outlook, received strong investors’ interest with the orderbook of the deal reaching $2bn, which allowed the lender to price the bond 25 bps lower than the initial price guidance of 210 bps. The new funding will allow the bank to invest in improving its services across all business units and enhance its digital offering. It will be part used for the bank’s liquidity management pool in advance of the repayment of an existing bond maturing in June 2019.