RAKBank Achieves Record Quarterly Profit in Q1 2026

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RAKBank announced on Monday its strongest quarterly performance ever in the first three months of 2026, reporting a profit after tax of Dh1 billion, a 43 percent increase year-on-year, driven by growth in its balance sheet, expanding margins, and a one-time gain from an asset sale.

The historic results were supported by double-digit growth across key metrics, with total assets rising 18 percent year-on-year to Dh107.3 billion, while customer deposits surged 22 percent to Dh74.3 billion, highlighting robust liquidity conditions amid ongoing lending activity. The bank’s eligible liquid assets ratio stood at 17.7 percent, reinforcing its capital strength.

A significant contributor to profitability was the improved returns, as the return on common equity jumped to 29.9 percent, up from 22.4 percent a year earlier, and the return on assets increased to 3.9 percent from 3.2 percent. The remarkable profitability was further enhanced by a Dh473 million gain from the sale of the bank’s merchant acquiring business, which boosted earnings during the quarter.

Operational performance was aided by an industry-leading net interest margin of 4.0 percent, supported by a current and savings account (CASA) ratio of 65.6 percent, helping to manage funding costs despite a competitive rate environment. The bank reported growth across its corporate, SME, and retail segments.

Balance sheet expansion coincided with improved asset quality, as the impaired loans ratio fell to 1.9 percent from 2.4 percent a year earlier, reflecting stricter underwriting standards and disciplined risk management. This improvement was supported by one of the highest provision coverage ratios in the sector at 277 percent as of March 2026.

Capital buffers remained strong, with a capital adequacy ratio of 18.7 percent, well above regulatory requirements, providing the capacity to support future growth.

The results underscore a broader trend among UAE lenders, where robust economic activity, stable asset quality, and selective balance sheet expansion continue to support earnings, even as banks navigate tighter financial conditions and increased competition for deposits.

RAKBank’s first-quarter performance positions it as one of the fastest-growing banks in terms of profitability metrics, with strong liquidity, capital, and asset quality providing a buffer against near-term volatility while supporting further expansion across its key customer segments.

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