GCC'S TOP
BANKS
GCC'S TOP
5
BANKS GULF BUSINESS / 43
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BANKS
Modest recovery in 2010 but challenging times remain
Following two difficult years, 2010 signified the stabilisation and recovery of the GCC banking sector after the impact of the global financial crisis. Returns for the sector improved for the first time since 2007. But as confidence remains fragile, 2011 is likely to be a year of continued modest improvement.
TEXT BY Darren Stubing
A
s expected, 2010 represented a recovery year for the GCC banking sector after two consecutive years of weaker returns. Three quarters of banks in the GCC 50 list recorded higher net profit last year. This was a good performance given the conditions, but the fact that the remaining banks saw lower profits underlines the still challenging market
environment in the region. In 2009 well over one half of the GCC 50 banks recorded lower net profit. Improved returns for the GCC were mainly driven by lower provisioning charges for most banks against both loans and investments. Non-performing loans in the region fell in 2010 following the sharp increase post the global and regional downturn and this led to a
lower cost of risk. Although overall asset quality improved in the region, some banks still recorded higher levels of bad debts. Asset values generally stabilised for both listed and unlisted securities, as well as for real estate, and so there was little need for further asset provisioning. Slightly higher credit demand aided balance sheet growth and, in turn, net interest income. However, credit demand GULF BUSINESS / 45
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BANKS is still lacklustre and is certainly not expected to grow quickly this year. Moreover, banks remain cautious in their lending activities, preferring to maintain good liquidity and to preserve capital levels, particularly as the recovery in loan asset quality continues. International funding continues to be tight and the Sukuk and bond market is still to recover. The bond market had shown some signs of promise towards the end of 2010 and early 2011 but has retracted in activity due to weaker investor appetite. This has been caused by the political instability and unrest in the wider region. The political risk is weighing on both investor and consumer sentiment;
economies in the region are reasonably solid in terms of economic growth. The price of oil was at a higher average level throughout the year, underpinning economic and infrastructure growth. Recent strategies by governments of increasing public sector salaries as well as one off payments will mean that the price of oil must remain high for governments, otherwise deficits will grow, placing pressure on fiscal positions. For the first time since 2007, net profit for the top 50 Gulf banks increased in 2010. The GCC’s largest banks achieved a healthy increase of 15.1 per cent in profit last year following falls of 1.5 per cent and 26.0 per cent respectively in the previous two years.
Significant improvements in terms of net profit were seen at a number of banks, including Abu Dhabi Islamic Bank, Saudi Hollandi Bank, Commercial Bank of Kuwait, Commercial Bank International and Bank Al Jazira. Other banks including Abu Dhabi Commercial Bank, Gulf Bank, Gulf International Bank and Kuwait International Bank moved to record good levels of net profit following large losses in the previous year. Gulf International Bank’s profit was its first in four years. The financial positions of nearly all GCC 50 banks strengthened in 2010 with improved capital adequacy helped by higher retained earnings, and moderate loan growth thereby aiding liquidity
Regional variation points Despite some economic profile similarities and close parallels in infrastructure and policy, there is noted variation amongst sector performance in Gulf countries. The Qatari banking sector is currently the most profitable amongst the GCC with banks registering higher rates of growth for loan assets in particular. The Qatari banking sector achieved a return on assets of 2.7 per cent in 2010. The Qatari economy continues to grow strongly aided by its huge petroleum production. The growth looks likely to continue leading up to the 2022 football World Cup. New banking regulations implemented by the Qatar Central Bank may impact credit growth and in turn profitability. The new regulations are aimed at tightening personal borrowing to both nationals and expats. The central bank also recently ordered conventional banks to close their Islamic banking operations by the end of the year. Although displaying some mixed results, Saudi Arabian banks are profitable and the sector achieves the second highest return in the Gulf at 1.96 per cent. This is largely due to its market size and fairly limited number of banks chasing that market share. The sector was hit by exposures to the Saad and Algosaibi groups but in general it has not been impacted by wider problems seen in other countries. The UAE banking sector remains profitable with a return on assets of 1.35 per cent but has also been negatively
impacted by rising non-performing loans, particularly to the corporate sector, up to the peak seen at the end of June 2010. Credit growth has also been low in the UAE, but not across the whole UAE sector as many medium and smallersized banks have performed very well, carving out and expanding successful niches. The Kuwaiti banking sector has been among the GCC’s most impacted, through problems and losses connected to real estate companies and investment vehicles together with securities losses at some banks previously. Its return on assets was 1.16 per cent in 2010. Credit growth rates in Kuwait are low but Kuwaiti banks should continue to see some modest recovery. The small Omani banking sector has avoided many of the recent problems seen elsewhere and its returns have remained steady at 1.71 per cent. Bahraini banks achieved a return on assets of 0.93 per cent in 2010. This was partly due to the continued large losses at Ithmaar Bank and still low returns at the Bahrain-based international banks. Country by country variation in performance will continue in the GCC with those with better growth prospects recording higher returns driven by increased credit demand. Overall however, sentiment should improve as the higher oil price is maintained. The one threat is the wider regional volatility and whether this will diminish.
GULF BUSINESS / 47
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BANKS GCC 50 Total Assets Rank 2010 and 2009 Rank Rank Bank Country 2010 2009 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50
1 2 5 3 4 8 9 6 7 10 11 12 13 14 15 17 18 16 19 20 24 21 28 22 25 26 23 31 27 30 29 31 35 34 33 44 36 37 38 42 43 39 40 50 41 45 48 46 47 49
Emirates NBD National Commercial Bank National Bank of Qatar National Bank of Abu Dhabi Samba Al Rajhi Banking Corporation Abu Dhabi Commercial Bank Riyad Bank National Bank of Kuwait Kuwait Finance House First Gulf Bank Saudi British Bank Banque Saudi Fransi Arab National Bank Arab Banking Corporation Ahli United Bank Dubai Islamic Bank Mashreqbank Union National Bank Abu Dhabi Islamic Bank Commercial Bank of Qatar Gulf Bank Albaraka Bank Group Gulf International Bank Bank Muscat Burgan Bank Saudi Hollandi Qatar Islamic Bank Saudi Investment Bank Doha Bank Commercial Bank of Kuwait Commercial Bank of Dubai Al Rayan Bank Al Jazira Ahli United Bank Kuwait Alinma Bank Ithmaar Bank Bank of Bahrain Kuwait National Bank of Bahrain RAKBANK Bank Al Bilad Bank of Sharjah Al Khalij Commercial Bank Boubyan Bank National Bank of Oman Sharjah Islamic Bank Bank Dhofar Kuwait International Bank Arcapita National Bank of Umm Al Qaiwain
UAE KSA Qatar UAE KSA KSA UAE KSA Kuwait Kuwait UAE KSA KSA KSA Bahrain Bahrain UAE UAE UAE UAE Qatar Kuwait Bahrain Bahrain Oman Kuwait KSA Qatar KSA Qatar Kuwait UAE Qatar KSA Kuwait KSA Bahrain Bahrain Bahrain UAE KSA UAE Qatar Kuwait Oman UAE Oman Kuwait Bahrain UAE
Total
2010 Assets US$000
2009 Assets US$000
Growth 2009-2010%
77,924,282 75,299,198 61,368,804 57,562,556 49,977,557 49,290,909 48,535,582 46,281,715 45,968,999 44,720,091 38,322,353 33,432,764 32,858,221 30,942,604 28,105,000 26,457,461 24,540,640 23,099,865 22,265,113 20,489,387 17,175,845 16,392,594 15,879,933 15,527,700 15,197,734 14,789,363 14,368,643 14,241,786 13,730,995 12,975,168 12,900,884 10,484,957 9,528,399 8,804,859 8,746,717 7,111,663 6,743,569 6,508,449 6,048,005 5,820,842 5,631,116 5,613,308 5,597,544 4,690,854 4,688,062 4,546,692 4,322,846 4,069,338 3,643,245 3,603,403
76,661,171 68,653,913 49,266,185 53,582,090 49,471,538 45,527,928 43,617,963 47,039,802 45,998,622 40,237,550 34,160,779 33,823,457 32,152,650 29,412,619 25,965,000 23,573,983 22,952,429 25,761,488 20,616,831 17,447,319 15,746,527 16,906,255 13,166,277 16,207,700 15,196,716 14,617,810 15,762,591 10,789,203 13,372,803 12,636,314 12,812,848 10,014,444 6,627,418 7,993,761 8,056,042 4,615,038 6,105,934 6,060,883 5,632,314 4,660,391 4,642,985 4,917,466 4,814,313 3,438,260 4,670,683 4,349,183 3,920,169 4,063,907 4,009,970 3,780,261
1.65 9.68 24.57 7.43 1.02 8.27 11.27 -1.61 -0.06 11.14 12.18 -1.16 2.19 5.20 8.24 12.23 6.92 -10.33 7.99 17.44 9.08 -3.04 20.61 -4.20 0.01 1.17 -8.84 32.00 2.68 2.68 0.69 4.70 43.77 10.15 8.57 54.10 10.44 7.38 7.38 24.90 21.28 14.15 16.27 36.43 0.37 4.54 10.27 0.13 -9.15 -4.68
1,116,827,617
1,045,511,783
Net Profit $000
Return on Assets 2010%
636,859 1,280,908 1,566,530 1,002,766 1,182,699 1,805,554 106,348 753,234 1,079,530 255,808 964,974 502,174 747,010 508,667 199,000 292,199 221,305 227,771 367,559 278,673 449,253 67,922 193,163 100,400 263,883 55,317 210,782 366,630 117,295 289,628 144,333 223,411 332,787 77,099 81,856 4,056 -139,612 104,120 114,415 273,006 24,619 109,977 117,226 21,771 70,575 72,529 86,442 59,708 34,299 95,507
0.82 1.70 2.55 1.74 2.37 3.66 0.22 1.63 2.35 0.57 2.52 1.50 2.27 1.64 0.71 1.10 0.90 0.99 1.65 1.36 2.62 0.41 1.22 0.65 1.74 0.37 1.47 2.57 0.85 2.23 1.12 2.13 3.49 0.88 0.94 0.06 -2.07 1.60 1.89 4.69 0.44 1.96 2.09 0.46 1.51 1.60 2.00 1.47 0.94 2.65
6.82 18,001,965
1.61
NB. Arcapita 6 months to end December 2010
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BANKS GCC 50 Total Capital Rank 2010 and 2009 Rank Rank Bank Country 2010 2009
2010 Capital US$000
2009 Capital US$000
Growth 2009-2010%
Net Profit 2010 $000
Return on Equity 2010%
1 1 Emirates NBD UAE 2 2 National Commercial Bank KSA 3 3 Al Rajhi Banking Corporation KSA 4 5 National Bank of Kuwait Kuwait 5 4 Riyad Bank KSA 6 10 National Bank of Qatar Qatar 7 7 Samba KSA 8 6 First Gulf Bank UAE 9 9 National Bank of Abu Dhabi UAE 10 8 Kuwait Finance House Kuwait 11 11 Abu Dhabi Commercial Bank UAE 12 12 Banque Saudi Fransi KSA 13 13 Alinma Bank KSA 14 14 Arab National Bank KSA 15 15 Saudi British Bank KSA 16 20 Arab Banking Corporation Bahrain 17 16 Commercial Bank of Qatar Qatar 18 17 Mashreqbank UAE 19 18 Union National Bank UAE 20 22 Dubai Islamic Bank UAE 21 19 Ahli United Bank Bahrain 22 21 Qatar Islamic Bank Qatar 23 24 Abu Dhabi Islamic Bank UAE 24 23 Saudi Investment Bank KSA 25 25 Bank Muscat Oman 26 28 Al Rayan Qatar 27 31 Burgan Bank Kuwait 28 26 Gulf International Bank Bahrain 29 27 Albaraka Bank Group Bahrain 30 32 Saudi Hollandi KSA 31 30 Commercial Bank of Kuwait Kuwait 32 29 Doha Bank Qatar 33 33 Commercial Bank of Dubai UAE 34 34 Gulf Bank Kuwait 35 36 Al Khalij Commercial Bank Qatar 36 37 Bank Al Jazira KSA 37 39 Bank of Sharjah UAE 38 38 Sharjah Islamic Bank UAE 39 35 Arcapita Bahrain 40 44 RAKBANK UAE 41 40 Investcorp Bahrain 42 41 Ahli United Bank Kuwait Kuwait 43 42 National Bank of Umm Al Qaiwain UAE 44 50 Boubyan Bank Kuwait 45 43 Bank Al Bilad KSA 46 47 National Bank of Bahrain Bahrain 47 48 Kuwait International Bank Kuwait 48 46 National Bank of Oman Oman 49 45 Ithmaar Bank Bahrain 50 49 Bank of Bahrain Kuwait Bahrain Total
9,188,562 8,761,785 8,084,744 7,949,022 7,795,525 6,811,178 6,781,249 6,706,003 6,565,047 5,710,348 5,328,981 4,806,146 4,165,481 4,105,782 4,045,853 3,860,000 3,434,027 3,371,898 3,248,271 2,865,902 2,752,175 2,506,595 2,208,182 2,171,033 2,068,556 1,957,910 1,928,522 1,918,000 1,818,190 1,703,188 1,660,365 1,657,828 1,600,583 1,463,698 1,443,786 1,204,138 1,196,551 1,170,705 1,122,408 1,011,805 975,450 945,453 870,014 848,857 827,456 699,388 698,957 690,414 654,016 639,739 155,999,764
8,704,232 8,229,376 7,664,236 6,552,591 7,529,452 5,460,442 5,949,354 6,235,439 5,565,088 5,580,719 5,197,419 4,200,475 4,161,424 3,860,871 3,478,744 2,581,000 3,299,501 3,225,563 2,904,335 2,445,086 2,581,431 2,473,929 1,945,150 1,980,835 1,847,574 1,637,845 1,554,025 1,779,400 1,736,845 1,502,086 1,570,754 1,607,358 1,456,564 1,453,498 1,326,897 1,196,231 1,115,355 1,160,989 1,429,268 761,496 960,000 845,813 820,197 310,530 800,582 641,941 617,257 650,366 711,435 614,346 141,915,343
5.56 6.47 5.49 21.31 3.53 24.74 13.98 7.55 17.97 2.32 2.53 14.42 0.10 6.34 16.30 49.55 4.08 4.54 11.84 17.21 6.61 1.32 13.52 9.60 11.96 19.54 24.10 7.79 4.68 13.39 5.70 3.14 9.89 0.70 8.81 0.66 7.28 0.84 -21.47 32.87 1.61 11.78 6.07 173.36 3.36 8.95 13.24 6.16 -8.07 4.13 9.92
636,859 1,280,908 1,805,554 1,079,530 753,234 1,566,530 1,182,699 964,974 1,002,766 255,808 106,348 747,010 4,056 508,667 502,174 199,000 449,253 227,771 367,559 221,305 292,199 366,630 278,673 117,295 263,883 332,787 55,317 100,400 193,163 210,782 144,333 289,628 223,411 67,922 117,226 77,099 109,977 72,529 34,299 273,006 56,235 81,856 95,507 21,771 24,619 114,415 59,708 70,575 -139,612 104,120 17,971,758
6.93 14.62 22.33 13.58 9.66 23.00 17.44 14.39 15.27 4.48 2.00 15.54 0.10 12.39 12.41 5.16 13.08 6.75 11.32 7.72 10.62 14.63 12.62 5.40 12.76 17.00 2.87 5.23 10.62 12.38 8.69 17.47 13.96 4.64 8.12 6.40 9.19 6.20 3.06 26.98 5.77 8.66 10.98 2.56 2.98 16.36 8.54 10.22 -21.35 16.28 11.52
NB. Arcapita and Investcorp 6 months to Dec. 2010
50 / MAY 2011
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BANKS GCC 50 NET PROFIT Rank 2010 and 2009 Rank 2010
Rank Bank Country 2009
1 1 Al Rajhi Banking Corporation KSA 2 3 National Bank of Qatar Qatar 3 4 National Commercial Bank KSA 4 2 Samba KSA 5 5 National Bank of Kuwait Kuwait 6 8 National Bank of Abu Dhabi UAE 7 7 First Gulf Bank UAE 8 9 Riyad Bank KSA 9 10 Banque Saudi Fransi KSA 10 6 Emirates NBD UAE 11 11 Arab National Bank KSA 12 12 Saudi British Bank KSA 13 13 Commercial Bank of Qatar Qatar 14 14 Union National bank UAE 15 15 Qatar Islamic Bank Qatar 16 20 Al Rayan Qatar 17 21 Ahli United Bank Bahrain 18 18 Doha Bank Qatar 19 43 Abu Dhabi Islamic Bank UAE 20 23 RAKBANK UAE 21 24 Bank Muscat Oman 22 19 Kuwait Finance House Kuwait 23 17 Mashreqbank UAE 24 22 Commercial Bank of Dubai UAE 25 16 Dubai Islamic Bank UAE 26 42 Saudi Hollandi KSA 27 26 Arab Banking Corporation Bahrain 28 25 Albaraka Bank Group Bahrain 29 46 Commercial Bank of Kuwait Kuwait 30 27 Saudi Investment Bank KSA 31 39 Al Khalij Commercial Bank Qatar 32 29 National Bank of Bahrain Bahrain 33 28 Bank of Sharjah UAE 34 49 Abu Dhabi Commercial Bank UAE 35 30 Bank of Bahrain Kuwait Bahrain 36 50 Gulf International Bank Bahrain 37 31 National Bank of Umm Al Qaiwain UAE 38 35 Bank Dhofar Oman 39 32 Invest Bank UAE 40 41 Ahli United Bank Kuwait Kuwait 41 45 Bank Al Jazira KSA 42 34 Sharjah Islamic Bank UAE 43 38 National Bank of Oman Oman 44 48 Gulf Bank Kuwait 45 47 Kuwait International Bank Kuwait 46 37 United Arab Bank UAE 47 36 Investcorp Bahrain 48 33 Burgan Bank Kuwait 49 40 National Bank of Fujairah UAE 50 46 Commercial Bank International UAE Total
Net Profit 2010 US$000
Net Profit 2009 US$000
Growth 2009-2010%
1,805,554 1,566,530 1,280,908 1,182,699 1,079,530 1,002,766 964,974 753,234 747,010 636,859 508,667 502,174 449,253 367,559 366,630 332,787 292,199 289,628 278,673 273,006 263,883 255,808 227,771 223,411 221,305 210,782 199,000 193,163 144,333 117,295 117,226 114,415 109,977 106,348 104,120 100,400 95,507 86,442 81,912 81,856 77,099 72,529 70,575 67,922 59,708 58,895 56,235 55,317 46,529 38,960 18,339,362
1,804,594 1,150,678 1,099,029 1,216,047 950,232 822,199 901,978 808,129 658,081 910,028 631,203 541,941 418,570 315,155 363,216 241,939 226,086 267,478 21,243 197,699 191,475 255,951 289,828 218,716 330,052 22,915 154,000 167,386 542 143,672 45,960 113,883 129,457 -139,613 93,130 -152,600 92,859 65,956 78,551 33,998 7,340 70,824 54,819 -100,046 -29,348 55,606 60,200 73,428 38,198 14,266 15,926,930
0.05 36.14 16.55 -2.74 13.61 21.96 6.98 -6.79 13.51 -30.02 -19.41 -7.34 7.33 16.63 0.94 37.55 29.24 8.28 1,211.83 38.09 37.82 -0.06 -21.41 2.15 -32.95 819.84 29.22 15.40 26,544.74 -18.36 155.06 0.47 -15.05 NA 11.80 NA 2.85 31.06 4.28 140.77 950.44 2.41 28.74 NA NA 5.91 -6.59 -24.67 21.81 173.09 15.15
NB. Investcorp and Arcapita 6 months to Dec 2010
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BANKS profiles. The customer deposit market remains by far the main source of funding for Gulf banks and the competition in all GCC countries remains intense. However, customer deposit funding did improve in 2010, albeit modestly. The Gulf’s top 50 banks’ consolidated assets rose by a slightly higher 6.8 per cent in 2010 to $1.1 trillion. The rise in the previous year was just over four per cent and hence in real terms balance sheets have barely grown over the past two years, underlying the challenging environment and fragile confidence for both the corporate and retail sectors. Total shareholders’ equity for the GCC 50 banks grew by a higher 9.9 per cent in 2010 and hence overall leverage fell
43-65 Top 50 banks.indd 54
once. Total equity stood at $156 billion at end 2010. This represented a higher 14.0 per cent of total assets against 13.6 per cent in the previous year. The largest bank by assets in the
Gulf region in 2010 remained the UAE’s Emirates NBD with assets of $77.9 billion. The bank’s asset growth was only by two per cent however. Qatari banks once again enjoyed by far
GCC 50 Banks: return on assets (%) 3.5 3 2.5 2 1.5 1 0.5 0
2005
2006
2007
2008
2009
2010
4/26/11 4:38:56 PM
GCC'S TOP
BANKS the best growth in terms of assets in 2010, reflecting the continued good performance of the domestic economy. Qatari banks’ assets grew by a high 21 per cent in 2010. The next highest growth was seen in Bahrain at a much lower 7.6 per cent with UAE banks third with growth of 6.3 per cent. Assets for banks in Saudi Arabia and Kuwait grew by just four per cent each with a lower two per cent in Oman. For Qatari banks, Al Rayan recorded a strong increase in assets of 44 per cent – Al Rayan’s asset growth was in fact the second highest in the GCC 50 list, beaten only by Saudi Arabia’s Alinma Bank – followed by Qatar Islamic Bank at 32 per cent and Qatar National Bank, the country’s largest bank, with growth of
43-65 Top 50 banks.indd 55
25 per cent. Following this growth Qatar National Bank moved up two places in ranking to become the third largest bank by assets in the GCC at end 2010. For UAE banks, the fast growing
RAKBANK recorded the highest increase in assets, 25 per cent to $5.8 billion, followed by Abu Dhabi Islamic Bank with asset growth of 17 per cent. Abu Dhabi Commercial Bank
GCC 50 Banks: return on EQUITY (%) 25 20 15 10 5 0
2005
2006
2007
2008
2009
2010
4/26/11 4:38:58 PM
GCC'S TOP
BANKS GCC 50 Net Profit Rank 2010 and 2009 by Countries BAHRAIN Country Bank Rank
Net Profit 2010 US$000
Net Profit 2009 US$000
Growth 2009-2010%
1
Ahli United Bank
292,199
226,086
29.24
2
Arab Banking Corporation
199,000
154,000
29.22
3
Albaraka Bank Group
193,163
167,386
15.40
4
National Bank of Bahrain
114,415
113,883
0.47
5
Bank of Bahrain Kuwait
104,120
93,130
11.80
100,400
-152,600
NA
56,235
60,200
-6.59
6
Gulf International Bank
7
Investcorp
8
Arcapita
34,299
-190,715
NA
9
Ithmaar Bank
-139,612
-251,508
NA
Net Profit 2010 US$000
Net Profit 2009 US$000
Growth 2009-2010%
21.96
UAE Country Bank Rank 1
National Bank of Abu Dhabi
1,002,766
822,199
2
First Gulf Bank
964,974
901,978
6.98
3
Emirates NBD
636,859
910,028
-30.02
4
Union National Bank
367,559
315,155
16.63
5
Abu Dhabi Islamic Bank
278,673
21,243
1,211.83
6
RAKBANK
273,006
197,699
38.09
7
Mashreqbank
227,771
289,828
-21.41
8
Commercial Bank of Dubai
223,411
218,716
2.15
9
Dubai Islamic Bank
221,305
330,052
-32.95
10
Bank of Sharjah
109,977
129,457
-15.05
11
Abu Dhabi Commercial Bank
106,348
-139,613
NA
12
National Bank of Umm Al Qaiwain
95,507
92,859
2.85
13
Invest Bank
81,912
78,551
4.28
14
Sharjah Islamic Bank
72,529
70,824
2.41
15
United Arab Bank
58,895
55,606
5.91
16
National Bank of FujaIrah
46,529
38,198
21.81
17
Commercial Bank International
38,960
14,266
173.09
Net Profit 2010 US$000
Net Profit 2009 US$000
Growth 2009-2010%
1,079,530
950,232
13.61
255,808
255,951
-0.06
KUWAIT Country Bank Rank 1
National Bank of Kuwait
2
Kuwait Finance House
3
Commercial Bank of Kuwait
144,333
542
26,544.74
4
Ahli United Bank Kuwait
81,856
33,998
140.77
5
Gulf Bank
67,922
-100,046
NA
6
Kuwait International Bank
59,708
-29,348
NA
7
Burgan Bank
55,317
73,428
-24.67
8
Boubyan Bank
21,771
-184,230
NA
56 / MAY 2011
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GCC'S TOP
BANKS GCC 50 Net Profit Rank 2010 and 2009 by Countries OMAN Country Bank Rank
Net Profit 2010 US$000
Net Profit 2009 US$000
Growth 2009-2010%
37.82
1
Bank Muscat
263,883
191,475
2
Bank Dhofar
86,442
65,956
31.06
3
National Bank of Oman
70,575
54,819
28.74
4
Oman International Bank
45,675
55,902
-18.29
Net Profit 2010 US$000
Net Profit 2009 US$000
Growth 2009-2010%
36.14
QATAR Country Bank Rank 1
National Bank of Qatar
1,566,530
1,150,678
2
Commercial Bank of Qatar
449,253
418,570
7.33
3
Qatar Islamic Bank
366,630
363,216
0.94
4
Al Rayan
332,787
241,939
37.55
5
Doha Bank
289,628
267,478
8.28
6
Al Khalij Commercial bank
117,226
45,960
155.06
Net Profit 2010 US$000
Net Profit 2009 US$000
Growth 2009-2010%
SAUDI ARABIA Country Bank Rank 1
Al Rajhi Banking Corporation
1,805,554
1,804,594
0.05
2
National Commercial Bank
1,280,908
1,099,029
16.55
3
Samba
1,182,699
1,216,047
-2.74
4
Riyad Bank
753,234
808,129
-6.79
5
Banque Saudi Fransi
747,010
658,081
13.51
6
Arab National Bank
508,667
631,203
-19.41
7
Saudi British Bank
502,174
541,941
-7.34
8
Saudi Hollandi
210,782
22,915
819.84
9
Saudi Investment Bank
117,295
143,672
-18.36
10
Bank Al Jazira
77,099
7,340
950.44
11
Bank Al Bilad
24,619
-66,237
NA
12
Alinma Bank
4,056
161,424
-97.49
achieved asset growth of 11 per cent in 2010, to $48.5 billion, and moved up two places to rank seventh largest in the Gulf. Saudi Arabian banks recorded mixed results. The GCC’s second largest bank by assets, National Commercial Bank, achieved good growth of 10 per cent with assets of $75 billion. Riyad Bank and Saudi British Bank saw assets fall slightly, again indicative of a more prudent approach.
Returns for the GCC 50 banks also improved in 2010 for the first time in three years. The return on assets for the top 50 GCC banks in 2010 was 1.61 per cent, up from a level of 1.51 per cent in 2009. By net profit, Saudi Arabia’s Al Rajhi Banking and Investment Corporation recorded the largest net profit in the Gulf. Although barely moving year-on-year, its net profit of $1.8 billion is by some way the largest. The gap was, however,
narrowed by an impressive performance at Qatar National Bank, which saw its net profit grow by 36 per cent to $1.6 billion, overtaking National Commercial Bank, to rank second by net profit despite the flagship Saudi bank also recording a good increase of 16 per cent in net profit. Other good performances included National Bank of Kuwait’s net profit rising by 14 per cent to around $1.1 billion and National Bank of Abu Dhabi’s net profit GULF BUSINESS / 59
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GCC'S TOP
BANKS GCC 50 TOTAL ASSETS Rank 2010 and 2009 by Countries BAHRAIN Country Bank Rank
2010 Assets US$000
2009 Assets Growth % US$000
Net Profit 2010 US$000
ROA 2010%
0.71
1
Arab Banking Corporation
28,105,000
25,965,000
8.24
199,000
2
Ahli United Bank
26,457,461
23,573,983
12.23
292,199
1.10
3
Albaraka Bank Group
15,879,933
13,166,277
20.61
193,163
1.22
4
Gulf International Bank
15,527,700
16,207,700
-4.20
100,400
0.65
5
Ithmaar Bank
6,743,569
6,105,934
10.44
-139,612
-2.07
6
Bank of Bahrain Kuwait
6,508,449
6,060,883
7.38
104,120
1.60
7
National Bank of Bahrain
6,048,005
5,632,314
7.38
114,415
1.89
8
Arcapita
3,643,245
4,009,970
-9.15
34,299
0.94
9
Investcorp
2,912,948
3,214,000
-9.37
56,235
1.93
NB. Arcapita and Investcorp 6 months to Dec. 2010
UAE Country Bank Rank
2010 Assets US$000
2009 Assets Growth % US$000
Net Profit 2010 US$000
ROA 2010%
0.82
1
Emirates NBD
77,924,282
76,661,171
1.65
636,859
2
National Bank of Abu Dhabi
57,562,556
53,582,090
7.43
1,002,766
1.74
3
Abu Dhabi Commercial Bank
48,535,582
43,617,963
11.27
106,348
0.22
4
First Gulf Bank
38,322,353
34,160,779
12.18
964,974
2.52
5
Dubai Islamic Bank
24,540,640
22,952,429
6.92
221,305
0.90
23,099,865
25,761,488
-10.33
227,771
0.99
22,265,113
20,616,831
7.99
367,559
1.65 1.36
6
Mashreqbank
7
Union National bank
8
Abu Dhabi Islamic Bank
20,489,387
17,447,319
17.44
278,673
9
Commercial Bank of Dubai
10,484,957
10,014,444
4.70
223,411
2.13
10
RAKBANK
5,820,842
4,660,391
24.90
273,006
4.69
11
Bank of Sharjah
5,613,308
4,917,466
14.15
109,977
1.96
12
Sharjah Islamic Bank
4,546,692
4,349,183
4.54
72,529
1.60
13
National Bank of Umm Al Qaiwain
3,603,403
3,780,261
-4.68
95,507
2.65
14
National Bank of Fujairah
3,512,115
3,237,376
8.49
46,529
1.32
15
Commercial Bank International
3,177,488
2,976,345
6.76
29,373
0.92
16
Invest Bank
2,814,729
2,633,366
6.89
81,912
2.91
17
United Arab Bank
1,946,574
1,904,418
2.21
58,895
3.03
NB Commercial Bank International Assets Sep 2010
KUWAIT Country Bank Rank
2010 Assets US$000
2009 Assets Growth % US$000
Net Profit 2010 US$000
ROA 2010%
1
National Bank of Kuwait
45,968,999
45,998,622
-0.06
1,079,530
2.35
2
Kuwait Finance House
44,720,091
40,237,550
11.14
255,808
0.57
3
Gulf Bank
16,392,594
16,906,255
-3.04
67,922
0.41
4
Burgan Bank
14,789,363
14,617,810
1.17
55,317
0.37
5
Commercial Bank of Kuwait
12,900,884
12,812,848
0.69
144,333
1.12
6
Ahli United Bank Kuwait
8,746,717
8,056,042
8.57
81,856
0.94
7
Boubyan Bank
4,690,854
3,438,260
36.43
21,771
0.46
8
Kuwait International Bank
4,069,338
4,063,907
0.13
59,708
1.47
60 / MAY 2011
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GCC'S TOP
BANKS GCC 50 TOTAL ASSETS Rank 2010 and 2009 by Countries OMAN Country Bank Rank
2010 Assets US$000
2009 Assets Growth % US$000
Net Profit 2010 US$000
ROA 2010%
1.74
1
Bank Muscat
15,197,734
15,196,716
0.01
263,883
2
National Bank of Oman
4,688,062
4,670,683
0.37
70,575
1.51
3
Bank Dhofar
4,322,846
3,920,169
10.27
86,442
2.00
4
Oman International Bank
3,001,578
2,699,558
11.19
45,675
1.52
2009 Assets Growth % US$000
Net Profit 2010 US$000
ROA 2010%
2.55
QATAR Country Bank Rank
2010 Assets US$000
1
National Bank of Qatar
61,368,804
49,266,185
24.57
1,566,530
2
Commercial Bank of Qatar
17,175,845
15,746,527
9.08
449,253
2.62
3
Qatar Islamic Bank
14,241,786
10,789,203
32.00
503,610
3.54
4
Doha Bank
2,975,168
12,636,314
2.68
289,628
2.23
5
Al Rayan
9,528,399
6,627,418
43.77
332,787
3.49
6
Al Khalij Commercial Bank
5,597,544
4,814,313
16.27
117,226
2.09
2009 Assets Growth % US$000
Net Profit 2010 US$000
ROA 2010%
SAUDI ARABIA Country Bank Rank
2010 Assets US$000
1
National Commercial Bank
75,299,198
68,653,913
9.68
1,280,908
1.70
2
Samba
49,977,557
49,471,538
1.02
1,182,699
2.37
49,290,909
45,527,928
8.27
1,805,554
3.66
46,281,715
47,039,802
-1.61
753,234
1.63
33,432,764
33,823,457
-1.16
502,174
1.50
3
Al Rajhi Banking Corporation
4
Riyad Bank
5
Saudi British Bank
6
Banque Saudi Fransi
32,858,221
32,152,650
2.19
747,010
2.27
7
Arab National Bank
30,942,604
29,412,619
5.20
508,667
1.64
8
Saudi Hollandi
14,368,643
15,762,591
-8.84
210,782
1.47
9
Saudi Investment Bank
13,730,995
13,372,803
2.68
117,295
0.85
10
Bank Al Jazira
8,804,859
7,993,761
10.15
77,099
0.88
11
Alinma Bank
7,111,663
4,615,038
54.10
4,056
0.06
12
Bank Al Bilad
5,631,116
4,642,985
21.28
24,619
0.44
growing by 22 per cent to $1 billion. Amongst the larger banks in the list, weaker performances were seen at Emirates NBD with profit down by 30 per cent to $637 million, Arab National Bank of Saudi Arabia’s net profit falling by 19 per cent to $509 million, and Mashreqbank’s net profit down by 21 per cent to $228 million. By return on assets, the best profitability
in the GCC 50 list is RAKBANK which achieved an impressive return on assets of 4.69 per cent in 2010. Second ranked is Al Rajhi with a return on assets of 3.66 per cent followed by Al Rayan Bank with 3.49 per cent. These banks also filled the top places in the previous year. By equity, the largest bank is again Emirates NBD with total shareholders’ equity of $9.2 billion at end 2010
following a six per cent increase. National Commercial Bank and Al Rajhi Bank remained second and third respectively. The main movers amongst the largest banks by capital included National Bank of Kuwait which saw its equity increase by 21 per cent to $7.9 billion, moving up to rank fourth from fifth, and Qatar National Bank whose equity grew by 25 per cent to $6.8
62 / MAY 2011
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GCC'S TOP
BANKS GCC 50 TOTAL CAPITAL Rank 2010 and 2009 by Countries BAHRAIN Country Bank Rank
2010 Capital US$000
2009 Capital Growth % US$000
Net Profit 2010 US$000
ROE 2010%
1
Arab Banking Corporation
3,860,000
2,581,000
49.55
199,000
5.16
2
Ahli United Bank
2,752,175
2,581,431
6.61
292,199
10.62
3
Gulf International Bank
1,918,000
1,779,400
7.79
100,400
5.23
4
Albaraka Bank Group
1,818,190
1,736,845
4.68
193,163
10.62
5
Arcapita
1,122,408
1,429,268
-21.47
34,299
3.06
6
Investcorp
975,450
960,000
1.61
56,235
5.77
7
National Bank of Bahrain
699,388
641,941
8.95
114,415
16.36
8
Ithmaar Bank
654,016
711,435
-8.07
-139,612
-21.35
9
Bank of Bahrain Kuwait
639,739
614,346
4.13
104,120
16.28
2009 Capital Growth % US$000
Net Profit 2010 US$000
ROE 2010%
UAE Country Bank Rank
2010 Capital US$000
1
Emirates NBD
9,188,562
8,704,232
5.56
636,859
6.93
2
First Gulf Bank
6,706,003
6,235,439
7.55
964,974
14.39
3
National Bank of Abu Dhabi
6,565,047
5,565,088
17.97
1,002,766
15.27
4
Abu Dhabi Commercial Bank
5,328,981
5,197,419
2.53
106,348
2.00
5
Mashreqbank
3,371,898
3,225,563
4.54
227,771
6.75
6
Union National Bank
3,248,271
2,904,335
11.84
367,559
11.32
7
Dubai Islamic Bank
2,865,902
2,445,086
17.21
221,305
7.72
8
Abu Dhabi Islamic Bank
2,208,182
1,945,150
13.52
278,673
12.62
9
Commercial Bank of Dubai
1,600,583
1,456,564
9.89
223,411
13.96
10
Bank of Sharjah
1,196,551
1,115,355
7.28
109,977
9.19
11
Sharjah Islamic Bank
1,170,705
1,160,989
0.84
72,529
6.20
12
RAKBANK
1,011,805
761,496
32.87
273,006
26.98
13
National Bank of Umm Al Qaiwain
870,014
820,197
6.07
95,507
10.98
14
Invest Bank
547,337
510,901
7.13
81,912
14.97
15
National Bank of Fujairah
492,367
454,267
8.39
35,604
7.23
16
Commercial Bank International
485,946
458,458
6.00
29,373
6.04
17
United Arab Bank
477,781
452,701
5.54
58,895
12.33
NB Commercial Bank International Sep 2010
KUWAIT Country Bank Rank
2010 Capital US$000
2009 Capital Growth % US$000
Net Profit 2010 US$000
ROE 2010%
1
National Bank of Kuwait
7,949,022
6,552,591
21.31
1,079,530
13.58
2
Kuwait Finance House
5,710,348
5,580,719
2.32
255,808
4.48
3
Burgan Bank
1,928,522
1,554,025
24.10
55,317
2.87
4
Commercial Bank of Kuwait
1,660,365
1,570,754
5.70
144,333
8.69
5
Gulf Bank
1,463,698
1,453,498
0.70
67,922
4.64
6
Ahli United Bank Kuwait
945,453
845,813
11.78
81,856
8.66
7
Boubyan Bank
848,857
310,530
173.36
21,771
2.56
8
Kuwait International Bank
698,957
617,257
13.24
59,708
8.54
GULF BUSINESS / 63
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GCC'S TOP
BANKS GCC 50 TOTAL CAPITAL Rank 2010 and 2009 by Countries OMAN Country Bank Rank 1
Bank Muscat
2
National Bank of Oman
2010 Capital US$000
2009 Capital Growth % US$000
Net Profit 2010 US$000
ROE 2010%
2,068,556
1,847,574
11.96
263,883
12.76
690,414
650,366
6.16
70,575
10.22
3
Bank Dhofar
588,312
529,888
11.03
86,442
14.69
4
Oman International Bank
439,229
444,620
-1.21
45,675
10.40
2009 Assets Growth % US$000
Net Profit 2010 US$000
ROA 2010%
23.00
QATAR Country Bank Rank
2010 Assets US$000
1
National Bank of Qatar
6,811,178
5,460,442
24.74
1,566,530
2
Commercial Bank of Qatar
3,434,027
3,299,501
4.08
449,253
13.08
3
Qatar Islamic Bank
2,506,595
2,473,929
1.32
503,610
20.09
4
Al Rayan
1,957,910
1,637,845
19.54
332,787
17.00
5
Doha Bank
1,657,828
1,607,358
3.14
289,628
17.47
6
Al Khalij Commercial Bank
1,443,786
1,326,897
8.81
117,226
8.12
2009 Assets Growth % US$000
Net Profit 2010 US$000
ROA 2010%
SAUDI ARABIA Country Bank Rank
2010 Assets US$000
1
National Commercial Bank
8,761,785
8,229,376
6.47
1,280,908
14.62
2
Al Rajhi Banking Corporation
8,084,744
7,664,236
5.49
1,805,554
22.33
3
Riyad Bank
7,795,525
7,529,452
3.53
753,234
9.66
4
Samba
6,781,249
5,949,354
13.98
1,182,699
17.44
5
Banque Saudi Fransi
4,806,146
4,200,475
14.42
747,010
15.54
6
Alinma Bank
4,165,481
4,161,424
0.10
4,056
0.10
7
Arab National Bank
4,105,782
3,860,871
6.34
508,667
12.39
8
Saudi British Bank
4,045,853
3,478,744
16.30
502,174
12.41
9
Saudi Investment Bank
2,171,033
1,980,835
9.60
117,295
5.40
10
Saudi Hollandi
1,703,188
1,502,086
13.39
210,782
12.38
11
Bank Al Jazira
1,204,138
1,196,231
0.66
77,099
6.40
12
Bank Al Bilad
827,456
800,582
3.36
24,619
2.98
billion, ranking sixth at end 2010 against tenth in the previous year. The largest increase in equity in 2010 was Kuwait’s Boubyan Bank, where National Bank of Kuwait has raised its stake. Its total capital increased to $849 million from $311 million previously. Arab Banking Corporation increased its equity by 50 per cent to $3.9 billion,
moving up four places. The GCC’s return on equity also improved from 2009 but only marginally to 11.5 per cent. This remains low but is in part driven by the high levels of capitalisation in the sector. Nonetheless, in the previous boom times of the mid 2000s the return on equity was in the twenties. Only 10 banks out of the GCC 50 achieved
a return on equity above 15 per cent, the benchmark for most banks. The largest 20 banks in the Gulf continue to dominate the overall asset base, with the bigger banks comprising 76 per cent of the total asset base of the list. By profit, the largest 20 represented 79 per cent of total net profit. This was however down from 96 per cent in the previous
64 / MAY 2011
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GCC'S TOP
BANKS year, and due to the improved profitability at a number of the mid-size GCC 50 banks. The aggregated return on assets for the top 20 banks is higher, at 1.71 per cent, than that of the 50 banks, but the gap has closed as the broader base of banks develop their market positions. 2010 marked the start of the recovery period for the Gulf banking sector after some very difficult years. The improvement in net profit and returns, albeit modest, is a positive sign and indicated that the problems of asset quality have peaked in the current cycle. First quarter 2011 earnings results
Right: ENBD, the largest GCC bank by assets. Below: NCB, Saudi Arabia’s largest bank.
“By profit, the largest 20 represented 79 per cent of total net profit. This was however down from 96 per cent in the previous year, and due to the improved profitability at a number of the midsize GCC 50 banks.
to date for both banks and corporates have exceeded expectations and market sentiment appears to have improved due to the continued strength of the oil price, and despite the heightened geopolitical risk. 2011 should see GCC banks make further advancements but they are likely to be small and conditions will remain challenging. GULF BUSINESS / 65
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