Report
EUR 9.28 For Business Accounts Only

Continues to grapple with SME stress as expected,

​Continues to grapple with SME stress as expected, while growth lacklustre on balance sheet re-engineering


  • ​RAKBANK closes the UAE banking season with a sizable earnings miss of -19% on higher credit costs, mainly driven by its legacy SME business loan portfolio. NPL ratio increased to 4.1% from 3.7% in Q2 as NPL formation remains elevated.
  • Operating profit, however, only +2% above our expectations, -2% q/q and -4% y/y as better non-funded income generation (driven by forex and investment income) helps offset the margin compression and low business volumes.
  • Growth continues to be subdued against the backdrop of balance sheet re-engineering whereby RAKBANK moves towards a relatively less risky business model, revamping and reducing its exposure to business banking book.

Underlying
National Bank of Ras Al-Khaimah

Provider
Arqaam Capital
Arqaam Capital

Established in 2007, Arqaam Capital is a specialist emerging markets investment bank, bringing regional and international product offerings to the emerging markets. Arqaam Capital combines international best practice with expertise in the markets in which we operate. Our primary role is to provide financial intermediation and create investment opportunities for frontier and emerging markets investors looking to invest in their own markets and abroad, as well as international investors seeking opportunities in target frontier and emerging markets. Arqaam Capital is headquartered in the Dubai International Financial Centre (DIFC), with additional offices in Libya, Lebanon, Egypt, and South Africa. 

Arqaam Capital's research platform provides the largest coverage footprint of MENA equities and one of the largest on the African continent with a total of 300 stocks under coverage. Arqaam Capital is ranked as one of the leading research providers in the region - a reflection of its broad coverage universe, its in-depth and high quality research, as well the compelling investment ideas that the team generates. The analysts closely analyze their sectors and issue in-depth company and sector research while the strategy team connects the micro with the macro, focusing on index analysis, macroeconomics and strategy research. 

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