National Bank of Ras Al Khaimah (RAKBank) reported a 26 per cent year-on-year rise in second-quarter net profit as interest and non-interest income rose and impairment charges for bad loans fell. Net profit for the first three months ending June 30 climbed to Dh285 million, the lender said in statement on Wednesday to the Abu Dhabi Securities Exchange, where its shares are listed. The second quarter results beat the estimates of investment bank EFG Hermes. On a year-on-year basis total operating income surged by 5.6 per cent to Dh993m at the end of the second quarter, mainly driven by an increase in non-interest income to Dh297m from Dh254m recorded for the same period in 2018, the lender said. Net interest income and income from Islamic financing rose by 1.4 per cent to Dh696m. “Whilst loan growth has been challenging in our personal banking and SME [small and medium-sized enterprises] segments due to market conditions, we continue to see good traction in our wholesale and financial institutions businesses,” Peter England, chief executive of RAKBank, said. “Our strategy remains focused on achieving diversification in our business, and its rewards are clearly seen in numbers achieved across business units.” The bank said its impairment charges for the three-month period dropped to Dh312m from the Dh325m recorded for the same period a year ago. “Good results driven by strong revenue and lower provisioning,” EFG Hermes banking analysts Shabbir Malik and Rajae Aadel said in a note to investors on Tuesday. “It is encouraging to see provisioning trend lower [the cost of risk eased to 357 basis points from 399bps in first quarter] and credit quality improving." The bank's non performing loan ratio eased to 3.7 per cent in the second quarter from 4 per cent in first quarter. Net income for the first six months of the year climbed by 28.5 per cent to Dh555m. Total income at the end of the first half also rose by 7 per cent as gross loans and advances increased by 0.4 per cent year-on-year. Total deposits during the first six months of 2019 reached Dh38.9 billion, a 13.9 per cent year-to-date rise. RAKBank expects its wholesale banking loan portfolio to grow by about 19 per cent year-on-year until 2021 and expects its SME and mortgage financing books to expand this year, despite tough market conditions, Mr England told <em>The National</em> in May. The lender, which traditionally lends to smaller businesses, launched its wholesale banking operation four years ago to include commercial loans and lending to financial and corporate sectors as it sought to diversify its business.