RAKBank’s profit tumbled by more than half last year despite the lender slashing Dh68 million from its staff costs as loan defaults surged.
The lender, also known as National Bank of Ras Al Khaimah, reported a fourth-quarter net profit Dh108.7 million, which was flat on the previous quarter. It did not provide a year-earlier comparison. Overall 2016 profits fell by almost 53 per cent to Dh662.9m.
The bank’s main focus for the past eight years has been on lending to small and medium-sized enterprises and that exposure to the struggling sector has taken a toll on its earnings over the past year.
Still, chief executive Peter England said after the bank reported its third-quarter earnings last year that it remained “firmly committed” to SME lending.
Faltering growth, a weaker oil price and a strong US dollar, to which the UAE dirham is pegged, have hurt many small businesses.
At the same time, banks have become less willing to lend to the sector as liquidity tightened and more businesses defaulted on their loans.
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