RAKBank provides retail and commercial banking services through a network of 27 branches in the UAE.
The bank, with a market capitalization of Dh6.53 billion and a dividend yield of 3.93 per cent, is on a recovery path post-COVID-19. Most UAE banks that have announced results have seen a rise in net profits on a quarter-over-quarter basis while experiencing a yearly decline.
The same is true of RAKBank as its net profit is down by 25.8 per cent compared to Q1-2020, but up 70.8 per cent compared to Q4-2020. The biggest driver of profit on a quarter-on-quarter basis is a decline in operating expenditure and provisions for impairment.
The Dubai teleco du (or Emirates Integrated Telecommunications Company) reported first quarter 2021 revenues of Dh2.88 billion compared to Dh2.98 billion last year. The decline of 3.35 per cent can be attributed to pandemic-induced market factors.
However, revenues grew 5.2 per cent quarter-over-quarter, for a third consecutive quarter of growth and reflecting a gradual recovery for several business activities. Mobile revenues stabilized at Dh1.31 billion, owing to 1.9 per cent growth in subscriber base to 6.8 million. On a year-on-year comparison, mobile revenues showed a 12.7 per cent erosion, possibly due to a slight dip in average revenue per user.
It could be because international transit is still on the lower side, resulting in reduced buying pressure of prepaid services. Capex was recorded at Dh568 million (+83 per cent year-on-year), reflecting a continuation of the capital deployment plan. The company seems to be positioning itself for the expected 5G rollout by impr
UAE banking giant ADCB s first quarter 2021 results show that the worst is over - and it is also reaping benefits from the synergies of integration.
But let s not get carried away as the healing is a gradual process. Interest rates had fallen sharply after the economic crisis of last year, which impacted the revenue growth at ADCB. Nonetheless, this helped improve the cost of funds to 0.78 per cent in the first quarter from 0.85 per cent in Q4-2020 and 1.98 per cent a year earlier.
Overall, net interest income of Dh2.119 billion was 10 per cent lower sequentially and decreased 24 per cent year-on-year from subdued economic conditions.
As good as it gets
So it is not surprising that NGI was not getting attention. Nonetheless, this company is a diamond in the rough with stellar financials. It has almost Dh300 million of net cash on its balance-sheet and virtually no debt. So an investor buying these shares is practically getting it for free.
To top it, the dividend yield for the coming year is expected to be near 6.07 per cent. For a value investor, this is as good as it gets.
On the revenue front, gross premiums rose 8 per cent to Dh578.9 million in 2020 compared to Dh535.9 million in 2019. The net underwriting income increased from Dh287.1 million in 2019 to Dh313.4 million, a gain of 9.1 per cent, and NGI was also able to reduce its costs successfully.