- Rakbank has received approval to issue non-convertible conventional bonds worth up to $500 million to enhance its capital adequacy ratio.
- The bank reported a 27.5% increase in net profit in the first quarter, reaching AED 574.2 million ($156.3 million).
- Rakbank’s eligible liquid asset ratio is at 13.5%, indicating a strong liquidity position.
- The advances to stable resources ratio stands at 78.7%, demonstrating effective liquidity management.
- The bond issuance aims to fortify financial stability and support sustained growth and resilience.
Rakbank, officially known as the National Bank of Ras Al Khaimah, has received approval to issue bonds worth up to $500 million. This decision, aimed at enhancing the bank’s capital adequacy ratio, was sanctioned during the lender’s latest General Assembly Meeting.
Details of the Bond Issuance
According to a filing with the Abu Dhabi Securities Exchange (ADX), the approval includes the issuance of non-convertible conventional bonds. These bonds will qualify as Tier 1 capital up to $500 million and/or Tier 2 capital up to $250 million. The primary goal of this move is to fortify the bank’s financial stability and strength.
Financial Performance and Liquidity
Rakbank, majority-owned by the government of Ras Al Khaimah, has shown a robust financial performance recently. In the first quarter of the year, the bank reported a significant net profit increase of 27.5%, reaching AED 574.2 million ($156.3 million). This impressive growth underscores the bank’s strong market position and effective financial strategies.
Moreover, Rakbank’s liquidity position remains robust. The bank’s eligible liquid asset ratio stands at 13.5%, indicating a healthy level of liquidity. Additionally, the advances to stable resources ratio is at 78.7%, further demonstrating the bank’s solid liquidity management.
Strategic Implications
By issuing these bonds, Rakbank aims to bolster its capital adequacy ratio, a critical measure of a bank’s financial health. This strategic move will not only strengthen the bank’s capital base but also enhance its ability to absorb potential financial shocks, ensuring sustained growth and stability in the long run.
Overall, Rakbank’s decision to issue up to $500 million in bonds reflects its proactive approach to maintaining financial resilience and supporting future growth initiatives.
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