March 4, 2024

Despite The Most Resilient Market Conditions Prevailing In Banking Arena Rakbank Still Keeping Afloat On SME and Mortgage Business Market


Despite the toughest tirade prevailing in the global banking arena, The National Bank of Ras Al Khamiah or RakBank, witnesses the growth in lending to primary SME’s (Small and Medium-sized Enterprises) as well as the Mortgages the coming year as it has an initiative summed up that’s spending up on the Dh100 million in 2020 on digitalization front, as stated by the Bank’s Chief in charge.

As stated by Peter England, “Lending firm owned primarily in majority by the Government Of RAK, witnessed an overall surge of the Mortgage loan abiding as per accounting books by nearly 13 percent during first nine months of the year and expects it to surge ahead up by another Dh300million within the close of this accounting year 2019.

Mr. England also as per statement given to The National pointed out that “the bank administration have strived hard in order to provide significant thrust in order to build as well as developing the book with an additional investment of another Dh500m [that’s all above the bank’s mortgage portfolio] to be rendered in the next fiscal year 2020.

This positive vibe proves enough in thwarting the most challenging environment prevailing in the property market and as well as the bouncy track with the strong emergence of a global slowdown lurking around the corner rocking the most powerful economies and that’s an after effect of mounting trade tensions between two powerful economies US and China.

As per the comments made by Central Bank governor Mubarak Al Mansoori the previous week, he stated that “the government is in pursuit of implementing the latest reforms in providing ample encouragement to the investment and as well by providing enough surplus package for bailing out the economic crisis and boosting the growth.

The country’s frontier banking institution Central Bank of the UAE is as well in consideration to amend new reforms that govern the financing of real estate as well as relaxing the overall financial cap on the funding to the sector.”

The regulator at present has allowed all banks to have a lending cap of 20 percent of their total deposits in the property sector, and this cap can be raised to a level that remains still a mystery.

However, it’s still unclear regarding what would probably be the overall end shape for the latest lot of regulations to be, and as well as how the Flexi cap would support in propelling up the rise of the property sector in the region.

RakBank trading primarily on the Abu Dhabi Securities Exchange has also witnessed an overall surge of Dh8.3bn during the first nine months in its SME loan book from Dh7.9bn as seen during the end of the previous year and Mr. England stated that the bank also expects it to surge to Dh8.5bn by the closing of the year.

So, he also added to the previous statement that by closing the SME loan book at Dh8.5bn this accounting year, it would only see a surge to be at Dh9bn the coming year. However, he also added that the growth will be there on the cards, but relatively at a much-subdued level.

Mr. England also stated that “most of the noteworthy SME’s that form the crux of the businesses in the UAE, are yet in a lot dilemma in raising debts as they are caught completely unaware regarding the turbulence caused in an economic scenario with the slowness as witnessed in the global growth.”

“We are in all probability doing sixty to seventy percent of latest SME loaning at the instant, and even thereupon style of the market share, we tend to are troubled to grow the book,” he stated.

RAKBank’s total loans and advances rising 4.3 percent throughout the first 9 months of the year, which can bog down next year as demand for credit remains subdued.

“The gross loans and advances that you simply can see in our revealed accounts would be around five percent for the total year [2019],” he said. “I’m foretelling a touch bit lower [loan growth], probably 3.5 to four percent would be the scoop for the U.S.A. next year.”

The bank that it reported a nineteen percent year-on-year rise in its third-quarter earnings is focusing attention on digitalizing its product and services; however, it won’t scale back its physical presence like Dubai’s Mashreq Bank putting an end to its most unconditional branches.



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