The National Bank of Ras Al-Khaimah (P.S.C.) Report and consolidated financial statements for the year ended 31-December-2017

Transcription

1. \1 \k/ The National Bank of Ras Al-Khaimah Report (P.S.C.) and consolidated financial statements for the year ended 31 December 2017
2. The National Bank of Ras Al-Khaimah (P.S.C.) Contents Directors’ flgfi report to the shareholders 1 Independent auditor’s report Consolidated statement of financial Consolidated income 5 position - - 4 9 10 statement 11 Consolidated statement of comprehensive income 12 Consolidated statement of changes in l3 equity Consolidated statement of cash flows Notes to the consolidated financial statements 14 15 - 92
3. w :3 I. 91th r'iuili unit dig RAKBANK “I DIRECTORS’ REPORT TO THE SHAREHOLDERS pleased to present the results of RAKBANK (the “Bank”) and its subsidiaries (collectively known as “Group”) for the year ended 31 December 2017. Net Profit for the year amounted to AED 810.5 million, an increase of AED 147.5 million (22.3%) over the previous year. Total Assets stood at AED 48.5 billion, an increase of 14.2% compared to 31 December 2016. Gross Loans and Advances closed at AED 33.2 billion, up by 11.6% over the previous year. The Return on Average Assets ratio closed at 1.8% and the Return on Average Equity was 10.6%. We are the Financial performance The increase of AED 147.5 million in Net Profit was mainly due to a decrease of AED 254.7 million in provision for impairment in loans. Total Operating Income decreased by 0.8% due to the rebalancing of the loan portfolio, while Operating Expenses increased by AED 77.8 million, up by 5.7% over the previous year. Operating Expenses increased, mainly due to legal and collection expenses and staff costs. impairment losses decreased by AED 107.2 million over 2016. This was offset by provisions for loan impairment by 14.1% from the previous year. Total impairment million in 2016. for the year was AED 1,552.9, million compared to AED 1,807.7 provision Operating a Profit before decrease in The decline in Total Operating Income by AED 29.5 million to AED 3.8 billion was mainly due to a decrease of AED 101.9 million in Net Interest Income and income fi'om Islamic finance net of distribution to depositors compared to the previous year. This decline was planned as part of our efforts to rebalance our lending portfolio to decrease our focus on higher risk unsecured lending. Net Interest financing fell to AED 2.7 billion. Interest income from conventional loans and investments increased by 0.9%, while interest costs on conventional deposits and borrowings rose by AED 83.2 million. Net income from Sharia-compliant financing was down by AED 43.2 million. Income and income from Islamic Non-interest income grew by AED 72.4 million to AED 1.1 billion. This was mainly due to increases of AED 62.0 million in income from fees and commissions, AED 5.3 million in other income, AED 19.4 million in gross insurance underwriting profit and AED 24.1 million in foreign exchange and derivative income. This was offset by a decrease of AED 38.4 million in investment income compared to 2016. Operating costs were up by AED 77.8 million, an increase of 5.7% in 2017. This was mainly due to an increase of AED 42.9 million in staff costs, AED 36.7 million in legal and collection expenses, AED 13.0 million in other expenses and AED 9.2 million in computer expenses. This was partly offset by a decrease in outsourced staff costs at AED 14.8 million and AED 10.7 million in depreciation. The Group’s cost to revenue ratio increased to 38.0% compared to 35.6% for the previous year. The non-performing loans and advances to gross loans and advances ratio dropped to 4.0% from 4.2% in the previous year. Net credit losses to average loans and advances were also reduced, closing at 5.0% compared to 6.2% in 2016. The Group is well provisioned against loan losses, with a conservative loan loss coverage ratio of 74.6% compared to 84.3% at the end of the previous year. This coverage ratio does not take into consideration mortgaged properties and other realizable asset collateral available against the loans. Additionally, the Bank has a non-distributable regulatory credit risk reserve equal to 1.5% of its credit risk rated assets, amounting to AED 492 million. Together with this reserve, the provision coverage ratio would increase to 11 1%. \mIVu"\-1-.r.5khan |-:.ae
4. * v.3 E1?! gibgll iiu-ia'll uni: I—l'u FIAK BANK —_i DIRECTORS’ REPORT TO THE SHAREHOLDERS Finuncinl performance (continued) (continued) Total Assets rose by 14.2% to AED 48.5 billion compared to the end of 2016. This was due to an increase in Gross Loans and Advances of AED 3.5 billion, lending to banks which grew by AED 1.2 billion and an increase in investments of AED 758 million. Wholesale Banking lending grew by 42.8%, up by AED - - 1.9 billion from the previous year. Personal Banking’s loan portfolio was up by AED 1.1 billion and Business Banking’s loan portfolio was up by AED 434.5 million compared to 31 December 2016. Customer \j an deposits grew by 9.4% to AED 32.2 billion compared to 2016. This growth came increase of AED 3.1 billion in time deposits and AED 297.0 million in demand deposits. mainly from Afier taking into consideration the profit for 2017 and proposed dividend for 2017, the Bank’s Tier ! ratio Basel H was 20.3% at per year-end. This compares with 22.3% at the end of 2016. The ratio as per Basel III as at end of 2017 stands at 20.7%. This level of capital provides the Bank with ample room for as growth in 2018. The 16.9% the regulatory eligible liquid asset ratio at the end of the year was 15.0%, resources ratio stood comfortably at 87.8% year. The advances to stable 85.5% at the end of2016. previous Dividend and appropriation compared to compared to of profits The Directors, at the board meeting held on 29 January 2018 have recommended a cash dividend of 30%. The dividend recommendations will result in 38% of net profit being retained within the Bank’s shareholders equity thereby increasing capital and reserves to strengthen the Bank’s overall position and provide support for future growth. The Directors propose to increase the of the Bank’s total credit risk regulatory credit risk weighted assets reserve by AED 71 million to align it at 1.5% Ratings The Bank is Rating currently rated by the following agencies. The ratings Lam age are uraIJalL' Ut'lltihil'i given below: Unlluuii Moody’s August 2017 Baal/P-Z Stable Fitch November 2017 BBB+/F2 Stable Capital Intelligence August 2017 A-/A2 Stable Developments in 2017 Launched 3 branches that are conveniently located in central business hubs Al Harnra in Ras Al Khaimah, Jabal Ali Free Zone (JAFZA) and Dubai Investment Park (DIP) in Dubai. Launched an enhanced Digital Banking platform. The Bank’s digital transformation is designed to provide end users with features such as heightened security, maximum convenience, and real-time transaction processingO new - Launched the Samsung Pay mobile payment solutions to the Bank’s customers ATMs, in partnership with Samsung Gulf Electronics. 0 on mobile phones and Signed an agreement with C3, 21 Prepaid Card Service Provider, to provide C3 with a BIN sponsorship on their prepaid cards to strengthen the C3 payroll offering. Introduced a ‘We Care’ campaign, which focuses mainly on enhancing the banking experience for people with determination, pregnant women, and mothers with children. Extended money remittance services to Pakistan through RAKMoneyTransfer. Signed an agreement with Sharjah Electricity & Water Authority (SEWA) to facilitate the SEWA bill payment solution through the Bank’s Digital Banking platform, for RAKBANK customers that live and have businesses in Sharjah. wa-vwxa khan |-..ae
5. 2 .51an mud! uni; Lam RAK BANK ‘—| DIRECTORS’ REPORT TO THE SHAREHOLDERS Developments in RAKBANK was to offer 201 7 (continued) (continued) the first bank in the Middle East to partner with FinTech platform, Invoice Bazaar, partnership allows RAKBANK to Finance transactions originated by Invoice a Chain Finance solutions to SME clientele. The Supply participate as a ‘Receivable Purchaser’ on Chain Supply Bazaar. Launched a USD 250 million 3—year Syndicated Term Loan Facility. The syndication was launched on 8 August 2017 and the facility was well received by the market and oversubscribed on the back of strong participation from regional and international banks. RAKBANK decided \y the facility headquarters in Dubai Silicon to upsize size to USD 350 million. Hosted the ‘Happiness Without Borders’ workshop at RAKBANK Oasis, which brought together Chief Happiness and Positivity Ministers from various government entities. Launch of Apple - Pay to the Bank’s customers. Entered the merchant country the ability across acquisition business with ‘RAKBANK Pay’ by offering merchants across the to accept electronic payments safely and securely, using the latest technology all channels. Partnered with Ripple to power instant remittance payments to India using Blockchain. RAKBANK is the first financial institution to offer blockchain remittance through Ripple. The Dubai Gold and Commodities (DMCC) and RAKBANK signed bullion products. - Dubai SME and RAKBANK Al Ras Khaimah a signed Economic Exchange (DGCX), the Dubai Multi Commodities Centre Understanding (MoU) for the development of Memorandum of a MoU to facilitate SME Zone (RAKEZ) and to offer the economic zone’s Understanding (MoU) banking services on preferential terms. providing stepping stone for signed 13,000+ clients easy Partnered with the Mohammed Bin Rashid Innovation a financing. RAKBANK Fund, MBRIF, start-ups in the UAE that have an to Memorandum a access to a of wide range of support local talent by innovative and sustainable business model. Recognition in 2017 RAKBANK June 2017 won the following awards at the H1 for the Yallacompare Banking Awards, January to period: I Home Loan Provider of the Year for Home in One. I SME Finance Provider of the Year. The Asian Banking and Finance Awards 2017 awarded RAKBANK following categories: Advertising Campaign of the Year in the UAE. New Consumer Lending Product of the Year in the UAE. with two titles for Home in One in the I I 0 RAKBANK won RAKBANK won Best SME Bank at the Banker Middle East Best (BME) Industry Awards 2017. Strategy, Change and Transformation - the International Digital Banking at Digital Banking at the International Business Excellence Awards 2017. RAKBANK won Best E—Commerce and Digital Experience - Business Excellence Awards 2017. The Bank received the Government Accelerator Recognition Award for achievements in Emiratisation. RAK Money Transfer won Remittance Product of the Year at the Middle East Asian Bankers Award. ww'.-‘.-.rakban|-;_ae
6. Maylmiuuijuur JRAK BANK _l g };- DIRECTORS’ REPORT TO THE SHAREHOLDERS (continued) Recognition in 201 7 ( continued) RAKBANK received the 11th Middle East Happiness and Positivity Excellence Award for the Banking and Financial category, from the Middle East Excellence Award Institute. I MasterCard 0 presented RAKBANK with Best SME Program. \4' Outloakfor 2018 Looking to 2018 and beyond, we will build on the successes of the year to maintain growth across our principal business units, while at the same time adapting and expanding our product range to exceed the expectations of our customers. Despite challenges in recent years, RAKBANK remains firmly committed to the SME community. We also see our re-entry into the wholesale market, and our refreshed approach to our Personal Banking offering as crucial to ensuring that we provide superior products and services to all clients in the UAE. We believe that the customers” journey is the Banks’ journey, and so the more holistic our offering the closer our relationship becomes. The Bank’s aim is to continue to diversify the loan book in core areas, while at the same time diversifying income from non-interest products and services, and expanding our footprint in the Wholesale and Treasury space. RAKBANK will continue to find ways to optimise its operating costs, improving efficiency across the Group, and to engage in strategic partnerships with selected parties that will give us a competitive edge in the market. For and . on behalf of the Board of Directors Mohamed Omran Alshamsi hairman 29 January 2018
7. I Deloitte a Touche (M.E.) Building 3, Level 6 . Emaar ;. Square Downtown Dubai P.O. Box 4254 Dubai United Arab Emirates Tel: +971 Faxz+971 (0) (0) 4 376 8888 4 376 8899 www.delcitte.com INDEPENDENT AUDITOR’S REPORT The Shareholders The National Bank of Ras Al-Khaimah (P.S.C.) Ras Al-Khaimah United Arab Emirates Report on the audit of the consolidated financial statements Opinion We have audited the consolidated financial statements of The National Bank of Ras Al-Khaimah P.S.C., Ras Al Khaimah, United Arab Emirates (the “Bank”) and its subsidiaries (together referred to as the “Group”) which the consolidated statement of financial position as at 31 December 2017, and the consolidated income comprise statement, consolidated statement of comprehensive income, consolidated statement of consolidated statement of cash flows for the year then ended, and a summary of significant other explanatory information. changes in equity and accounting policies and our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at 31 December 2017, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards In (IFRSs). Basis for Opinion Auditing (ISAS). Our responsflailities under those standards are firrther described in the Auditor’s responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Group in accordance with the International Ethics Standards Board for Accountants’ Code ofEthicsflzr Professional Accountants (IESBA Code) together with the other requirements relevant to our audit of the Group’s consolidated financial statements in the United Arab Emirates, and We conducted our audit in accordance with International Standards on other ethical responsibilities in accordance With the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. we have fillfilled our Key audit matters Key audit matters are those matters that, in our professional judgement, of most significance in our audit of the in the context of our audit of addressed consolidated financial statements of the cun‘ent period. and we do not provide a separate our and in the consolidated financial statements as a whole, forming opinion thereon, These matters were were opinion on these matters. Impairment against loans and advances Risk How the matter was addressed in on this area because it requires management charged with governance to make significant judgements, such as the identification of loans that are deteriorating, the assessment of objective evidence of impairment, and the assessment of the recoverable amount and the value of collateral. Due to the significance of net loans and advances (representing 66% of total assets) and the related estimation uncertainty, we consider this a key audit matter. The portfolios which give rise to the greatest uncertainty are typically those where impairments are derived fi'om collective models, relate to unsecured exposures or are subject to potential collateral shortfalls. Our audit We focused and those our audit procedures included the assessment of over the approval, recording and monitoring controls of loans, and evaluating the methodologies, inputs and assumptions used by the Bank in calculating collectively assessed impairments and assessing the adequacy of impairment allowances for individually assessed loans. Cont’d. . . (521), Cynthia Corby (995), Georges Najem (809), Mohammad Khamees Al Tah (717), Musa Ramahl (872), Mutasem auditors with the UAE Ministry of Dajani (726), Rama Padmanabha Acharya (701) and Sarnlr Madbak (386) are registered practising Anis Sadek Economy.
8. Deloitte . INDEPENDENT AUDITOR’S REPORT (continued) Key audit matters (continued) Impairment against loans and advances (continued) Risk How the matter was addressed in It is the judgements for collective provisioning which are significant as they are the most sensitive to We evaluated the design our and effectiveness of relevant controls to the most audit tested operating identify loss events adjustment. The two key judgements in the collective and assess and determine the extent to which provisioning assessment are the likelihood of default and impairments should be recognised considering the the emergence period and it is the earlier which is the potential for management override of controls. These included testing: single most critical judgement. 0 System-based and manual controls over the timely The Bank’s individual provisions are also subjective as a and recognition of impaired loans; identification result of judgements needed and the relatively limited 0 Controls over the impairment calculation models; amount of data available for future cash flows. These individually monitored and the assessment of provisions for these loan portfolios involves knowledge of each borrower. The key judgement for individual provisions on these portfolios is the recoverable value of underlying collateral. loans 0 are individual A management overlay is applied to the modelled provisioning balances to reflect risk factors not taken into account by the models. This requires judgement in relation to the factors to be reflected estimated value. as well as their 0 Controls over collateral valuation estimates; and Controls over governance and approval process related to impairment provisions, including continuous reassessment by the management. sample of loans We tested a impairment events had been identified in to assess whether a timely manner. In addition, we also focused on individually significant exposures. We tested the assunrptions underlying the impairment identification and quantification including Management also applies adjustments, or overlays, forecasts of future cash flows, valuation of underlying where they believe the data driven parameters and collateral and estimates of recovery on default. calculations are not appropriate, either due to emerging We paid particular attention to collective impairment trends or models not capturing the risks in the loan methodologies, focusing specifically on retail loans, portfolio. An example of this is an overlay for the either due to their relative size or the potential impact of concentration against certain borrowers which and We also focused on assumptions. changing inputs management apply on top of the impairment model more sensitive to that were potentially portfolios output. These overlays require significant judgement. trends. economic emerging Valuation Our audit procedures included offinancial instruments financial investments in accordance ‘Financial Instruments’ and IFRS 13 Accounting for with IAS 39 I be complex and has a significant impact measuring the Bank’s objectives. Financial instruments valuation carries high risk, in ‘Fair Value Measurement’ can on particular unquoted and illiquid investments valuation due to: I Inherently existing models; a judgemental area for unquoted I investments. I I Using inappropriate models to value investments. Using inappropriate assumptions to value investments. I I I Depending supported by Reliability of prices that are fully being used for Reviewing and testing internal controls related to valuation of financial instruments; Reviewing valuations for stale prices that may not quoted investments; be indicative of fair value for I valuation models not robust and objective evidence. on valuation. the design and testing operating effectiveness of the relevant controls in the Banks’s financial instrument valuation processes including the controls over data feeds and other inputs into valuation models and the controls over testing and approval of new models or changes to Evaluating Reviewmg specific investment valuation models unquoted investments and assessing reasonableness of assumptions used in models; for
9. Deloitte . 7 INDEPENDENT AUDITOR’S REPORT (continued) Key audit matters (continued) Valuation offinancial instruments (continued) How the matter was addressed in Risk Hedge topic I "1 accounting is a complex accounting Methodology of testing, I designation, measuring of ineffectiveness and documentation; and I hedging instruments value adjustments for considering credit and funding risk. own counterparty, Valuation audit procedures included (continued) Verifying market values of quoted investments (securities), comparing observable inputs against independent sources and externally available market data and evaluating compliance with IFRS 13 'Fair Value Our audit financral reporting due to: effectiveness our Measurement '; of I I I I Reviewing accounting policy for impairment for quoted debt and equity available-for—sale investments; For instruments with significant, unobservable valuation inputs, we used our own internal valuation specialists to assess and challenge the valuation assumptions used, including considering alternative valuation methodologies used by other market participants; Comparing the Bank’s pricing approach to other major institutions; Reviewing the Bank’s policy for classification of valuations as level 1, 2 or 3 and other financial instruments disclosures. Reviewing risk management strategy and objectives: I critically assessed the adequacy of the Bank’s including the accuracy of the fair value measurement categorisation and adequacy of the disclosure of the valuation techniques, significant unobservable inputs, changes in estimate occurring during the period and the sensitivity to the key assumptions; for hedging qualifying accounting Reviewing and designation including hedge relationships We also disclosures I effectiveness assessment; and I Ensuring proper disclosures in the consolidated financial statements. Reliability and continuity of the information technology and systems How the matter was addressed in Risk having appropriate IT systems and controls in place may lead to severe Failure of not consequences on business continuance and the financial reporting process. I our audit We evaluated the design and operating effectiveness of Group’s IT access controls overtheinformation systems that are critical to financial reporting. We tested IT general controls (logical access, change management and aspect of IT operational controls). This included testing that requests for access to systems were appropriately reviewed and authorised and access for terminated or transferred employees is revoked in timely manner. We tested the user authentication, privilege access controls around key application systems and infrastructure supporting them. We tested the Group’s periodic review of access rights. We inspected requests of changes to systems for appropriate approval and authorisation. We considered the control relating to various automated calculations, environment access controls, configurable controls and other application layer controls identified as key to our audit. automated
10. Deloitte . INDEPENDENT AUDITOR’S REPORT (continued) Other information responsible for the other information. The other information comprises the annual report the Director’s report to the shareholder prior to the date of this auditor’s report, and the We obtained Group. remaining information of the annual report is expected to be made available to us afler that date. The other information does not include the consolidated financial statements and our auditor’s report thereon. The Board of Directors is of the Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance or conclusion thereon. audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. In connection with our If, based on the work we have performed on the other information that we obtained prior to the date ofthis auditor’s fact. report, we conclude that there is a material misstatement of this other information, we are required to report that We have nothing to report in this regard. read the remaining information of the annual report of the Group, if we conclude that there is misstatement therein, we are required to communicate the matter to those charged with governance. When we a material Responsibilities ofmanagement and those charged with gavemancefnr the consolidatedfinancial statements Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS and applicable provisions of the UAE Federal Law No. (2) of 2015, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fi'aud or error. preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Group’s financial reporting process. In Auditor’s responsibilitiesfor the audit of the consolidatedfinancial stamens Orn' objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are flee from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstaternents can arise from fi'aud and are considered material if, individually or In the aggregate, they could reasonably be influence the economic decisions of users taken on the basis of these consolidated financial statements. or error expected As part of an audit in accordance with ISAs, we exercise professionaljudgment and maintain professional throughout I the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficth and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement Identify and assess higher than for one resulting fiom error, as fraud intentional omissions, misrepresentatrons, or the ovenide of internal control. I skepticism the audit. We also: resulting I to from fiaud is may involve collusion, forgery, understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. Obtain an
11. Deloitte ... INDEPENDENT AUDITOR’S REPORT (continued) responsibilities for the audit of the cansalidatedfinancial statements (continued) on Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based cast that may the audit evidence obtained, whether a material uncertainty exists related to events or conditions a going concern. If we conclude that a material uncertainty as to continue the on doubt Group’s ability significant disclosures in the consolidated exists, we are required to draw attention in our auditor’s report to the related are based on financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions Auditor’s . conditions may cause the audit evidence obtained up to the date of our auditor’s report. However, future events or the Group to cease to continue as a going concern. consolidated financial statements, including the transactions and events disclosures, and whether the consolidated financial statements represent the underlying in a manner that achieves fair presentation. of the Bank ' Obtain sufficient appropriate audit evidence regarding the financial information of the subsidiaries for the are We direction, supervision responsible to express an opinion on the consolidated financial statements. and performance of the group audit. We remain solely responsible for our audit opinion. and timing We conununicate with those charged with governance regarding, among other matters, the planned scope we identify that internal control in deficiencies audit of the audit and significant findings, including any significant during our audit. with relevant ethical We also provide those charged with governance with a statement that we have complied and to communicate with them all relationships and other matters that may I Evaluate the overall presentation, structure and content of the requirements regarding independence, related safeguards. reasonably be thought to bear on our independence, and where applicable, matters that were of most From the matters communicated with those charged with governance, we determine those are therefore the key audit and current period significance in the audit of the consolidated financial statements of the disclosure about matters. We describe these matters in our auditor’s report unless law or regulation precludes public not be communicated in our the matter or when, in extremely rare circumstances, we determine that a matter should to be expected outweigh the public interest report because the adverse consequences of doing so would reasonably benefits of such communication. Report an other legal and regulatory requirements As required by the UAE Federal Law No. (2) of 2015, we report that: i) ii) considered necessary for the purposes of our audit; the Group have been prepared and comply, in all material respects, of The consolidated financial statements with the applicable provisions of the UAE Federal Law No. (2) of 2015; We have obtained all the information we iii) The Group has maintained proper books of account; consistent with the Group’s books of account; iv) The financial information included in the Directors’ report is securities purchased or invested in shares v) Note 7 to the consolidated financial statements of the Group discloses 31 December ended 2017; during the financial year material related party transactions, the vi) Note 34 to the consolidated financial statements of the Bank discloses conflict of interests; of and terms under which they were conducted principles managing to our attention which causes us has come vii) Based on the information that has been made available to us nothing December 2017 any of the ended 31 financial year to believe that the Bank has contravened during the of Association which would its Articles or of 2015 applicable provisions of the UAE Federal Law No. (2) of and December 2017; materially affect its activities or its financial position as at 31 statements of the Bank discloses social contributions made during the financial the consolidated 41 to Note viii) . financial year ended 31 December 2017. we report that Further, as required by the UAE Union Law No (10) of 1980, as amended, of our audit. for the considered we purpose necessary information and explanations Deloitte & Touche (M.E.) Musa Ramahi Registration No. 872 29 January 2018 Dubai United Arab Emirates - we have obtained all the
12. The National Bank of Ras Al —Khaimah Consolidated statement of financial as 10 (P.S.C.) position at 31 December 2017 Notes 2017 2016 AED’000 AED’OOO ASSETS Cash and balances with UAE Central Bank 4 Due from other banks 5 Loans and advances, 6 net Investment securities 7 Insurance contract assets and receivables 8 Customer acceptances Other assets 9 Goodwill and other intangible assets Property and equipment 10 11 Total assets 4,740,566 3,799,239 32,240,193 5,568,749 424,897 171,307 545,935 170,932 875,340 4,431,016 2,629,230 28,725,869 4,8 10,682 340,959 49,563 475,925 174,141 872,844 48,537,158 42,510,229 2,764,199 32,175,874 4,169,302 516,991 171,307 371,041 1,561,877 29,3 98,185 2,730,072 465,826 49,563 724,327 40,668,714 34,929,850 1,676,245 950,431 1,879,029 3,031,209 LIABILITIES AND EQUITY Liabilities 12 Due to other banks Deposits 13 from customers Debt securities in issue and syndicated borrowing Insurance contract liabilities and payables Customer acceptances Other liabilities 14 15 16 Total liabilities Equity Share capital Legal reserve Retained earnings 18 Other 19 1,676,245 950,431 2,101,295 3,089,364 20 7,817,335 51,109 7,536,914 43,465 7,868,444 7,5 80,379 48,537,158 42,510,229 17 reserves Equity attributable to owners Non-controlling interests Total equity Total Liabilities and . of the Bank Equity Mohamed Omran Alshamsi Chairman The accompanying notes form an integral part of these consolidated financial statements.