Gulf Business May 2009 | Top 50 Banks

Top 50 GCC banks

Changing

fortunes After years of exceptional earnings growth, the financial crisis severely affected the performance of the GCC’s Top 50 Banks in 2008. Saudi Arabian banks were again strong contenders, but this year’s survey saw several change of position, writes DARREN STUBING. 58 Gulf Business May 2009

Top 50 GCC banks

B

uffered’, ‘isolated’ and ‘liquid’ are words often used to describe the Gulf region’s banking sector.

‘Immune’, however, is no longer one of them. Gulf Business’ annual Top 50 GCC Banks tracks the ups and downs of an industry that has hitherto been known mainly for its skyrocketing trajectory.

The global financial crisis hit the Gulf banking sector in 2008 as the fallout from the US credit crunch affected regional economies, as well as the prices of international assets held by GCC banks. Bank earnings were weaker, as portfolios started to register higher levels of non-performing loans and this state of affairs required additional provisions. Specific economic sectors in the Gulf have been affected but the hardest hit has been the property sector, with exposures at a number of banks becoming problematic.

Regional economies have not only been affected by weakness in global trade but, in addition, the sharp fall in the price of oil has reduced Gulf economic growth. Of course, not all Gulf states and not all banks have suffered to the same degree. Some banks recorded improved results for 2008. But overall, for the GCC 50, returns were much weaker in 2008.

THE BIG PICTURE For the first time in more than eight years, net profits for the top 50 GCC banks fell on an annual basis in 2008. The fall of a significant 26 per cent in aggregated net profits to $15.9 billion was in part due to substantial losses at a few banks, including Kuwait’s Gulf Bank, and Bahrain’s Arab Banking Corporation and Investcorp. However, more than half the banks registered weaker-thanbefore net profits in 2008, with some also affected by the fallout of the subprime housing crisis and associated asset write-downs, which first surfaced in 2007.

In a weaker operating environment, banks generally followed a more cautious approach, in part reflecting weaker credit demand.

They also acted on instructions from various regional central banks to rein back credit growth in areas such as consumer banking.

This behaviour also reflected a strategic imperative to reduce risk-weighted assets

and help shelter capital adequacy ratios.

Despite all of these factors, overall growth remained robust, although again there were regional variations. Banks in Saudi Arabia and Qatar, for instance, recorded stronger growth while those in Kuwait were generally weaker. Particularly in the first half of the year, banks experienced good rates of increase in both assets and shareholders equity.

Consolidated assets of the GCC Top 50 rose by 15 per cent in 2008 to more than $1 trillion. This compares to 35 per cent on an aggregated basis in 2007, with assets of $877 billion. Total equity for the GCC Top 50 grew by 11 per cent in 2008 to $124 billion.

Accordingly, capital adequacy declined marginally across the region in 2008, although this was not the case for all banks.

Reflecting the fall in net income last year, profitability for the GCC Top 50 was sharply lower. The return on assets for the GCC Top 50 in 2008 was 1.53 per cent against 2.42 per cent in 2007. Return on equity also fell significantly in 2008, to a low of 13.7 per cent from 19.4 per cent in 2007. Previously, the GCC financial institutions were among the most profitable banks globally, benefiting from a rampant regional economy and sustained high oil price. However, going forward, banks will need to generate a broader base of core banking income, and, for many, rely less on trading income.

The dominance of the largest 20 banks weakened marginally in 2008, in part owing to the emergence of a few more prominent banks such as Awal Bank, Al Rayan, and Dubai Bank, but also because medium-sized banks grew at a faster rate. The largest 20 Gulf banks comprised 75 per cent of the combined asset base (83 per cent in 2007) and 80 per cent (2007: 79 per cent) of consolidated net profit at year-end 2008. The aggregated return on assets for the top 20 banks was slightly higher, at 1.65 per cent, than that of the top 50 banks.

Saudi Arabian banks continued to dominate the high end of the list, occupying seven of the top 15 slots by assets, equity and net profits.

SAUDI ARABIA Saudi Arabian banks continued to dominate the high end of the list, occupying seven of the top 15 slots by assets, equity and net profits for 2008. This is not surprising as the Kingdom has by far the largest economy and, in turn, the biggest domestic banking sector in the region. However, Saudi banks did not escape the prevailing weakness in the region and six Saudi banks in the top 50 saw a decline in net profits in 2008.

National Commercial Bank (NCB), still the Gulf ’s largest bank by shareholders equity and second by assets, saw its net profits fall by 66 per cent in 2008, to $562 million. Its operating performance was reasonable but provisions for the impairment of financial assets (including hedge funds, equities, securities, structured credits and private equity funds) soared to SR2.48 billion ($661 million at current exchange rates) from SR269 million in 2007. In addition, an impairment loss on goodwill of SR1.188 billion was booked. The bank’s return on equity was just 7.7 per cent in 2008 with return on assets 0.95 per cent.

In contrast, some Saudi banks did record much improved results in 2008, particularly Saudi Hollandi Bank (SHB), whose net profits moved up by 172 per cent in 2008, to $326 million (SR1.224 billion), placing it 21st in regard to net profits from a position of 40th previously.

Leading Islamic institution Al Rajhi Banking and Investment Corporation saw net profits fall by just 1 per cent in 2008.

Accordingly, it remained the No. 1 ranked bank by some margin in the GCC, based on net profits of $1.74 billion. It also edged up to second place on shareholders’ equity, following a 12 per cent rise to $7.2 billion.

Al Rajhi’s returns are still high, with a return on assets of 4 per cent and return on equity of 24 per cent. Both ratios remain among the highest in the region.

UNITED ARAB EMIRATES Emirates NBD remained the GCC’s largest bank by assets at the end of last year, with a balance sheet of $77 billion, up by about 12 per cent year-on-year. By shareholders equity it slipped slightly in ranking, to third place. It also occupied the third ranking by net profits, up from a position of fifth May 2009 Gulf Business 59

Top 50 GCC banks in the previous year. Despite its net profits declining by 6 per cent in 2008, the fall was lower than those of previously higher ranked banks, such as NCB and Kuwait Finance House.

Emirates NBD’s financial performance was affected by write-downs and impairments on investment securities and credit default swaps (CDS). Total write-downs and impairments amounted to Dhs2.26 billion in 2008. Although the company acknowledges the correction in the Dubai real estate sector, Emirates NBD’s management is comfortable with the bank’s overall exposure.

Overall, UAE banks have the most representatives on the top 50 list, with 13 names in the total assets table. This was also the case in shareholders equity and net profits.

Notable performances were registered by First Gulf Bank (FGB) and RAK Bank. FGB saw its net profits rise by 49 per cent to $816 million, and its ranking by net profits shot to seventh position from 15th.

FGB’s asset grew by 47 per cent to $29.3 billion, and its ranking improved to 14th from 19th previously. Its shareholders’ equity rose by 64 per cent to $4.5 billion, pushing its ranking on total equity to ninth in 2008 from 16th in 2007. In a timely move, in July 2008, before the liquidity squeeze hit the region, the bank announced issuance of mandatory convertible bonds worth Dhs3.6 billion to UAE institutional strategic partners.

More recently, and in response to Abu Dhabi’s initiative to inject additional capital into certain Abu Dhabi financial institutions, FGB announced that it would issue Tier 1 capital notes to the Government of Abu Dhabi, with a principal amount of Dhs4 billion. The bank is also one of the most profitable in the UAE – FGB’s return on assets in 2008 was 2.79 per cent.

KUWAIT Kuwaiti banks had a difficult year in 2008, led by the problems at Gulf Bank. For 2008, it recorded a loss of $1.27 billion following profits of $478 million in 2007. Although ranked 21st in terms of assets, it was not in the top 50 by equity following the massive loss. The loss was largely owing to exceptional losses in derivative transactions and losses on its investment and loan portfolios relating to the global financial crisis. In January 2009 (after the Gulf Business rankings’ cut-off date), Gulf 60 Gulf Business May 2009

GCC Top 50 Banks’ Return on Assets (%) 3.5 3 2.5 2 1.5 1 0.5 0

2002 2003 2004 2005 2006 2007 2008

Bank successfully raised KD376 million ($1.3 billion) as share capital and share premium in a rights offering to existing shareholders with the unsubscribed portion of 16 per cent taken up by Kuwait Investment Authority. The bank is now in a restructuring phase. Kuwait’s flagship bank, National Bank of Kuwait (NBK), saw its net profits slip by 6 per cent in 2008, a reasonable performance given the difficult domestic and international conditions. By equity, it slipped marginally to fifth place from fourth.

Kuwait Finance House, a leading Islamic bank, also experienced a tough year, with net profits down by 48 per cent to $619 million, with its ranking sliding from fourth to 12th in terms of net profit. By equity, it ranked

sixth. However, its return on assets was reasonable at 1.66 per cent in 2008.

QATAR AND OMAN The Qatari economy performed well in 2008 and has not been hit as hard as some of the other regional economies. Qatar’s leading bank, Qatar National Bank (QNB), was a strong performer, with its net profits rising by 46 per cent in 2008, to $1 billion, propping the bank up to fourth position in the net profits ranking from tenth in 2007. Its return on assets was 2.4 per cent, with the bank registering good rates of growth in both assets and equity.

Qatar’s second largest bank, Commercial Bank of Qatar, advanced its net profits by 21 per cent to $464 million while Qatar Islamic Bank (QIB) increased its net profits by 31 per cent to $451 million. Both banks moved up the rankings across assets, equity and net profit.

Al Rayan Bank, Qatar’s full-fledged Islamic investment and commercial bank, has grown in prominence in a short time.

Although net profits dipped by 23 per cent to $250 million, its return on assets is a high 5.4 per cent. The bank ranked 25th in terms of net profits and 27th in terms of equity at year-end 2008.

The bigger Omani banks, such as Bank Muscat and National Bank of Oman, had

TOP 20 BANKS’ RETURN ON ASSETS Al Rayan

Qatar Islamic Bank

RAKBANK

TIBC

Al Rajhi Bank

Bank Al Jazira

First Gulf Bank

Commercial Bank of Qatar

Bank of Sharjah

National Bank of Oman

SAMBA

Doha Bank

Qatar National Bank

Ahli Bank of Qatar

Commercial Bank of Kuwait

Bank of Kuwait and the Middle East Banque Saudi Fransi

Saudi British Bank

Union National Bank

Commercial Bank of Dubai

5.44 4.90 4.57 4.11 3.96 3.03 2.79 2.76 2.59 2.51 2.49 2.43 2.40 2.39 2.34 2.29 2.23 2.22 2.21 2.16

Top 50 GCC banks solid years as they managed largely to avoid the fallout from the financial downturn.

Both banks saw increases in net profits and were able to climb up the rankings.

BAHRAIN Bahrain-based banks had a tough year.

Significant losses were recorded by Arab Banking Corporation (loss of $836 million), Investcorp (loss of $511 million for the six months to end December 2008), and Gulf International Bank (loss of $396 million).

The Arab Banking Corporation’s (ABC) results were affected by the wave of adversity following the subprime mortgage crisis in the US. Impairment provisions for the year totalled $1.05 billion, mainly from the first half of 2008 when the group made a clean sweep of its exposures to structured investment vehicles and collateralised debt obligations, setting aside $733 million.

Also during the first half of 2008, ABC exited all its investments in hedge funds.

Additional impairment provisions were required in the second half of 2008 to respond to further deterioration in both GCC and international financial markets.

ABC’s equity base remained sound at yearend 2008, following the increase in its paidup capital in June 2008 through a rights issue from $1 billion to $2 billion. ABC’s capital adequacy ratio, calculated on the basis of the Basel II capital adequacy regime, stood at 16.2 per cent at the year-end.

For Investcorp, its results for the half year were hit by losses in its private equity activities of $95 million, and losses of $398 million in hedge fund investment operations.

The bank saw a decline of more than $526 million on balance sheet co-investments, a significant amount of which was unrealised and driven by mark-to-market accounting requirements.

Gulf International Bank’s (GIB) bottomline performance was hit by higher exceptional loan provisioning charges as well as provision for investment securities that have subsequently been sold. The bank has sold its entire portfolio of collateralised debt obligations and other backed securities. The loss of $396 million for 2008 compares with a loss of $757 million in 2007.

Despite the loss, GIB has strengthened its capital base and its capital adequacy ratio stood at 17.3 per cent at end 2008.

Other declines in net profits for Bahraini 62 Gulf Business May 2009

GCC Top 50 Banks’ Return on Equity (%) 25 20 15 10 5 0 2002 2003 2004 2005 2006 2007 2008 banks included Arcapita, Awal Bank, Ithmaar and The International Banking Corporation (TIBC). TIBC remained profitable with a return on assets of 4.1 per cent. The Saad Group’s Awal Bank, established only in late 2004, had a loss of $19.8 million in 2008. However, its shareholders’ equity now stands at $2.7 billion, with the bank ranked 18th in terms of

Consolidated assets of the GCC Top 50 banks rose by 15 per cent in 2008 to more than $1 trillion. This compares to a 35 per increase in 2007.

equity among the GCC top 50 banks.

Two other Bahrain-based banks, Gulf Finance House and United Gulf Bank, recorded declines in net profits of 15 and 20 per cent, respectively, but both remained profitable. By net profits ranking, they were stable at 23rd and 29th, respectively.

In conclusion, 2008 was a tough year for the GCC banking sector, as evidenced by the decline in net profits and returns for the GCC Top 50. Much of the weaker performance in 2008 was because of increased provision charges on both loans and investments. The latter hit a number of banks particularly hard. The big question is how Gulf banks will perform in 2009. Much of the investment write-downs may already have been booked.

However, the delinquency rate in respect of loan portfolios is likely to rise during the course of this year as an increased percentage of loan portfolios become non-performing. This, in turn, will see higher cost of risks for many banks in the region. Asset growth, specifically loans, will also be subdued in 2009, reflecting the more difficult operating conditions. Margins will remain tight, as the cost of borrowing will continue to be high, particularly on the wholesale side. All of these factors will contribute to the likelihood of continued lacklustre returns for the banking sector in 2009. n

TOP 20 BANKS’ RETURN ON EQUITY RAKBANK

30.60 Gulf Finance House

30.19 United Gulf Bank

26.33 Saudi British Bank 25.10 Al Rajhi Bank 24.14 Qatar Islamic Bank 23.00 SAMBA 22.20 Qatar National Bank 21.95 Saudi Hollandi Bank 21.41 Bank of Kuwait and the Middle East 21.15 National Bank of Abu Dhabi 21.03 Commercial Bank of Kuwait 20.25 Banque Saudi Fransi 19.94 Arab National Bank 19.62 Doha Bank 19.27 Union National Bank 18.73 National Bank of Oman 18.39 First Gulf Bank 18.03 Bank Al Jazira 17.98 Commercial Bank of Qatar 16.94

Top 50 GCC banks

Top 50 GCC BANKS 2008 ranked by Total Assets ($000s) 2008 RANK

2007 RANK

1 2 3 4 5

1 2 4 5 6

6 7 8 9 10

BANK NAME

COUNTRY

YEAR ENDED

CURRENT ASSETS 08

PREVIOUS ASSETS 07

GROWTH Y-O-Y (%)

PROFIT

08 ROA (%)

Emirates NBD National Commercial Bank SAMBA National Bank of Abu Dhabi Al Rajhi Banking and Investment Corporation

UAE S.Arabia S.Arabia UAE S.Arabia

12/08 12/08 12/08 12/08 12/08

76,991,815 59,147,193 47,704,317 44,888,220 43,981,280

69,009,147 57,059,283 42,213,831 37,909,385 34,141,579

11.57 3.66 13.01 18.41 28.82

1,003,580 561,895 1,187,690 822,970 1,739,894

1.30 0.95 2.49 1.83 3.96

3 7 10 12 9

National Bank of Kuwait Riyad Bank Qatar National Bank Abu Dhabi Commercial Bank Kuwait Finance House

Kuwait S.Arabia Qatar UAE Kuwait

12/08 12/08 12/08 12/08 12/08

43,389,462 42,574,007 41,739,527 40,220,042 37,390,574

41,817,072 33,174,998 31,417,766 28,878,154 32,226,799

3.76 28.33 32.85 39.27 16.02

933,419 703,669 1,003,171 369,856 619,333

2.15 1.65 2.40 0.92 1.66

11 12 13 14 15

14 13 15 19 8

Saudi British Bank Banque Saudi Fransi Arab National Bank First Gulf Bank Arab Banking Corporation

S.Arabia S.Arabia S.Arabia UAE Bahrain

12/08 12/08 12/08 12/08 12/08

35,109,518 33,563,936 32,348,571 29,273,539 28,486,000

26,849,534 27,285,631 25,825,627 19,928,543 32,744,000

30.76 23.01 25.26 46.89 -13.00

778,672 748,176 662,966 816,010 -836,000

2.22 2.23 2.05 2.79 -2.93

16 17 18 19 20

16 11 17 18 22

Mashreqbank Gulf International Bank Ahli United Bank Dubai Islamic Bank Union National Bank

UAE Bahrain Bahrain UAE UAE

12/08 12/08 12/08 12/08 12/08

25,386,202 25,033,500 23,582,727 23,063,711 17,758,038

23,857,173 29,954,000 23,049,852 22,756,933 15,098,482

6.41 -16.43 2.31 1.35 17.61

471,568 -396,200 309,742 471,634 392,373

1.86 -1.58 1.31 2.04 2.21

21 22 23 24 25

20 25 23 26 21

Gulf Bank Commercial Bank of Qatar Saudi Hollandi Bank Bank Muscat Commercial Bank of Kuwait

Kuwait Qatar S.Arabia Oman Kuwait

12/08 12/08 12/08 12/08 12/08

17,542,553 16,836,515 16,382,982 15,657,756 15,271,812

18,619,048 12,471,780 13,781,490 10,955,130 15,711,696

-5.78 35.00 18.88 42.93 -2.80

-1,274,823 464,121 326,331 243,459 357,199

-7.27 2.76 1.99 1.55 2.34

26 27 28 29 30

24 29 28 27 32

Saudi Investment Bank Abu Dhabi Islamic Bank Burgan Bank Al-Ahli Bank of Kuwait Doha Bank

S.Arabia UAE Kuwait Kuwait Qatar

12/08 12/08 12/08 12/08 12/08

14,292,364 13,960,922 13,877,578 10,769,362 10,712,160

12,723,637 11,973,839 10,430,575 10,846,740 8,257,748

12.33 16.60 33.05 -0.71 29.72

141,338 232,014 131,684 163,262 259,957

0.99 1.66 0.95 1.52 2.43

31 32 33 34 35

30 34 31 33 NR

Commercial Bank of Dubai Qatar Islamic Bank Bank of Kuwait and the Middle East Awal Bank Bank Al Jazira

UAE Qatar Kuwait Bahrain S.Arabia

12/08 12/08 12/08 12/08 12/08

9,748,181 9,212,622 7,943,262 7,645,173 7,338,587

8,275,154 5,861,475 8,191,644 8,651,946 5,894,092

17.80 57.17 -3.03 -11.64 24.51

210,277 451,124 182,270 -19,770 222,300

2.16 4.90 2.29 -0.26 3.03

36 37 38 39 40

35 36 40 39 41

Bank of Bahrain and Kuwait National Bank of Bahrain Ithmaar Bank Ahli Bank of Qatar National Bank of Oman

Bahrain Bahrain Bahrain Qatar Oman

12/08 12/08 12/08 12/08 12/08

5,744,788 5,409,840 5,380,426 4,888,568 4,690,673

5,550,424 5,063,060 4,078,789 4,279,226 3,835,390

3.50 6.85 31.91 14.24 22.30

71,645 92,390 85,162 116,941 117,922

1.25 1.71 1.58 2.39 2.51

41 42 43 44 45

42 38 46 NR NR

Al Rayan Arcapita* Al Bilad Bank of Sharjah Dubai Bank

Qatar Bahrain S.Arabia UAE UAE

12/08 12/08 12/08 12/08 12/08

4,605,625 4,456,525 4,397,750 4,312,985 4,296,257

2,799,854 5,137,355 4,313,357 2,933,438 2,968,277

64.50 -13.25 1.96 47.03 44.74

250,701 42,741 34,265 111,782 63,253

5.44 0.96 0.78 2.59 1.47

46 47 48 49 50

49 43 45 37 NR

Sharjah Islamic Bank Kuwait International Bank RAKBANK TIBC Investcorp*

UAE Kuwait UAE Bahrain Bahrain

12/08 12/08 12/08 12/08 12/08

4,225,621 3,840,426 3,795,443 3,794,222 3,674,617

2,936,378 3,476,960 2,983,627 4,061,109 4,766,327

43.91 10.45 27.21 -6.57 -22.90

63,139 70,213 173,382 156,087 -511,110

1.49 1.83 4.57 4.11 -13.91

1006337,775

877,027,353

14.74

15,393,672

1.53

TOTAL

Y-O-Y: year-on year; ROA: return on assets; NR: not ranked; *: Investcorp and Arcapita six months results to end December 2008.

May 2009 Gulf Business 63

Top 50 GCC banks TOP 50 GCC banks RANKED BY total shareholders’ equity 2008 RANK

2007 RANK

BANK NAME

COUNTRY

YEAR ENDED

CURRENT EQUITY 08

PREVIOUS EQUITY 07

GROWTH Y-O-Y (%)

PROFIT

1 2 3 4 5

1 3 2 8 4

National Commercial Bank Al Rajhi Banking and Investment Corporation Emirates NBD Riyad Bank National Bank of Kuwait

S.Arabia S.Arabia UAE S.Arabia Kuwait

6 7 8 9 10

5 6 7 16 9

Kuwait Finance House SAMBA Qatar National Bank First Gulf Bank Abu Dhabi Commercial Bank

11 12 13 14 15

11 10 13 15 14

16 17 18 19 20

12/08 12/08 12/08 12/08 12/08

7,342,800 7,208,480 7,023,233 6,850,787 5,684,240

8,094,712 6,453,460 6,840,341 3,605,018 6,142,084

-9.29 11.70 2.67 90.03 -7.45

561,895 1,739,894 1,003,580 703,669 933,419

7.65 24.14 14.29 10.27 16.42

Kuwait S.Arabia Qatar UAE UAE

12/08 12/08 12/08 12/08 12/08

5,655,422 5,349,831 4,571,059 4,524,806 4,333,013

5,150,527 4,914,176 3,807,243 2,755,358 3,102,703

9.80 8.87 20.06 64.22 39.65

619,333 1,187,690 1,003,171 816,010 369,856

10.95 22.20 21.95 18.03 8.54

National Bank of Abu Dhabi Banque Saudi Fransi Arab National Bank Saudi British Bank Mashreqbank

UAE S.Arabia S.Arabia S.Arabia UAE

12/08 12/08 12/08 12/08 12/08

3,913,906 3,751,770 3,379,013 3,102,355 2,908,358

3,080,833 3,072,975 2,877,224 2,849,978 2,854,451

27.04 22.09 17.44 8.86 1.89

822,970 748,176 662,966 778,672 471,568

21.03 19.94 19.62 25.10 16.21

12 24 17 22 NR

Dubai Islamic Bank Commercial Bank of Qatar Awal Bank Ahli United Bank Union National Bank

UAE Qatar Bahrain Bahrain UAE

12/08 12/08 12/08 12/08 12/08

2,834,149 2,740,578 2,702,273 2,394,777 2,095,297

2,899,701 1,710,939 2,222,043 2,648,121 1,825,390

-2.26 60.18 21.61 -9.57 14.79

471,634 464,121 -19,770 309,742 392,373

16.64 16.94 -0.73 12.93 18.73

21 22 23 24 25

19 29 18 20 21

Arab Banking Corporation Qatar Islamic Bank Gulf International Bank Commercial Bank of Kuwait Saudi Investment Bank

Bahrain Qatar Bahrain Kuwait S.Arabia

12/08 12/08 12/08 12/08 12/08

2,088,000 1,961,794 1,925,500 1,763,805 1,762,293

2,157,000 1,271,693 2,215,300 1,930,462 1,850,686

-3.20 54.27 -13.08 -8.63 -4.78

-836,000 451,124 -396,200 357,199 141,338

-40.04 23.00 -20.58 20.25 8.02

26 27 28 29 30

25 40 26 33 NR

Bank Muscat Al Rayan Abu Dhabi Islamic Bank Saudi Hollandi Bank Arcapita*

Oman Qatar UAE S.Arabia Bahrain

12/08 12/08 12/08 12/08 12/08

1,630,053 1,563,126 1,536,684 1,524,040 1,401,325

1,856,496 1,417,203 1,473,866 1,243,007 1,429,807

-12.20 10.30 4.26 22.61 -1.99

243,459 250,701 232,014 326,331 42,741

14.94 16.04 15.10 21.41 3.05

31 32 33 34 35

35 30 27 36 NR

Doha Bank TIBC Commercial Bank of Dubai Burgan Bank Bank Al Jazira

Qatar Bahrain UAE Kuwait S.Arabia

12/08 12/08 12/08 12/08 12/08

1,349,287 1,325,068 1,282,185 1,263,401 1,236,480

994,223 1,595,531 1,293,882 1,286,227 8,850,00

35.71 -16.95 -0.90 -1.77 39.72

259,957 156,087 210,277 131,684 222,300

19.27 11.78 16.40 10.42 17.98

36 37 38 39 40

28 46 32 43 37

Ithmaar Bank Sharjah Islamic Bank Al-Ahli Bank of Kuwait Bank of Sharjah Gulf Finance House

Bahrain UAE Kuwait UAE Bahrain

12/08 12/08 12/08 12/08 12/08

1,149,351 1,145,007 1,107,837 1,047,651 966,873

1284,397 573,788 1,168,828 624,882 879,504

-10.51 99.55 -5.22 67.66 9.93

85,162 63,139 163,262 111,782 291,885

7.41 5.51 14.74 10.67 30.19

41 42 43 44 45

34 38 39 31 44

Bank of Kuwait and the Middle East Al Bilad United Gulf Bank Investcorp* National Bank of Oman

Kuwait S.Arabia Bahrain Bahrain Oman

12/08 12/08 12/08 12/08 12/08

861,702 856,757 815,251 708,196 641,301

955,000 850,440 804,738 1,237,170 604,642

-9.77 0.74 1.31 -42.76 6.06

182,270 34,265 214,617 -511,110 117,922

21.15 4.00 26.33 -72.17 18.39

46 47 48 49 50

45 41 49 42 NR

Kuwait International Bank National Bank of Bahrain Dubai Bank RAKBANK Bank of Bahrain and Kuwait

Kuwait Bahrain UAE UAE Bahrain

12/08 12/08 12/08 12/08 12/08

585,106 578,150 571,054 566,691 555,095

581,465 663,540 556,625 428,766 629,467

0.63 -12.87 2.59 32.17 -11.81

70,213 92,390 63,253 173,382 71,645

12.00 15.98 11.08 30.60 12.91

11.18

17,058,056

TOTAL 124,135,212 111,650,910

Y-O-Y: year-on year; ROA: return on assets; NR: not ranked; *: Investcorp and Arcapita six months results to end December 2008.

64 Gulf Business May 2009

08 ROE (%)

13.74

Top 50 GCC banks TOP 50 GCC BANKS RANKED BY TOTAL NET PROFIT ($000s) 2008 RANK

2007 RANK

BANK NAME

COUNTRY

YEAR ENDED

NET PROFIT 2008

NET PROFIT 2007

Growth Y-O-Y (%)

1 2 3 4 5

1 3 5 10 6

Al Rajhi Banking and Investment Corporation SAMBA Emirates NBD Qatar National Bank National Bank of Kuwait

S.Arabia S.Arabia UAE Qatar Kuwait

12/08 12/08 12/08 12/08 12/08

1,739,894 1,187,690 1,003,580 1,003,171 933,419

1,763,213 1,319,957 1,072,885 688,494 997,242

-1.32 -10.02 -6.46 45.71 -6.40

6 7 8 9 10

11 15 9 8 7

National Bank of Abu Dhabi First Gulf Bank Saudi British Bank Banque Saudi Fransi Riyad Bank

UAE UAE S.Arabia S.Arabia S.Arabia

12/08 12/08 12/08 12/08 12/08

822,970 816,010 778,672 748,176 703,669

681,114 546,735 712,687 741,166 823,217

20.83 49.25 9.26 0.95 -14.52

11 12 13 14 15

12 4 2 16 13

Arab National Bank Kuwait Finance House National Commercial Bank Dubai Islamic Bank Mashreqbank

S.Arabia Kuwait S.Arabia UAE UAE

12/08 12/08 12/08 12/08 12/08

662,966.4 619,333 561,895 471,634 471,568

672,846 1,191,923 1,650,541 511,147 568,819

-1.47 -48.04 -65.96 -7.73 -17.10

16 17 18 19 20

20 22 25 14 18

Commercial Bank of Qatar Qatar Islamic Bank Union National Bank Abu Dhabi Commercial Bank Commercial Bank of Kuwait

Qatar Qatar UAE UAE Kuwait

12/08 12/08 12/08 12/08 12/08

464,121 451,124 392,373 369,856 357,199

382,065 344,891 321,087 566,865 440,864

21.48 30.80 22.20 -34.75 -18.98

21 22 23 24 25

40 21 23 30 NR

Saudi Hollandi Bank Ahli United Bank Gulf Finance House Doha Bank Al Rayan

S.Arabia Bahrain Bahrain Qatar Qatar

12/08 12/08 12/08 12/08 12/08

326,331 309,742 291,885 259,957 250,701

119,896 359,826 343,258 254,523 327,596

172.18 -13.92 -14.97 2.13 -23.47

26 27 28 29 30

35 36 34 29 31

Bank Muscat Abu Dhabi Islamic Bank Bank Al Jazira United Gulf Bank Commercial Bank of Dubai

Oman UAE S.Arabia Bahrain UAE

12/08 12/08 12/08 12/08 12/08

243,459 232,014 222,300 214,617 210,277

218,850 208,938 220,126 268,276 254,464

11.24 11.04 0.99 -20.00 -17.36

31 32 33 34 35

38 44 26 32 NR

Bank of Kuwait and the Middle East RAKBANK Al-Ahli Bank of Kuwait TIBC Saudi Investment Bank

Kuwait UAE Kuwait Bahrain S.Arabia

12/08 12/08 12/08 12/08 12/08

182,270 173,382 163,262 156,087 141,338

176,557 109,132 278,535 416,571 224,770

3.24 58.87 -41.39 -62.53 -37.12

36 37 38 39 40

28 41 47 43 42

Burgan Bank National Bank of Oman Ahli Bank of Qatar Bank of Sharjah National Bank of Bahrain

Kuwait Oman Qatar UAE Bahrain

12/08 12/08 12/08 12/08 12/08

131,684 117,922 116,941 111,782 92,390

274,059 115,886 83,146 109,843 110,530

-51.95 1.76 40.64 1.77 -16.41

41 42 43 44 45

37 49 52 48 NR

Ithmaar Bank of Bahrain and Kuwait Kuwait International Bank Dubai Bank Sharjah Islamic Bank

Bahrain Bahrain Kuwait UAE UAE

12/08 12/08 12/08 12/08 12/08

85,162 71,645 70,213 63,253 63,139

188,310 79,411 65,568 22,067 82,055

-54.78 -9.78 7.08 186.65 -23.05

46 47 48 49 50 51 52

33 55 46 39 17 NR NR

Arcapita* Al Bilad Awal Bank Gulf International Bank Investcorp* Arab Banking Corporation** Gulf Bank**

Bahrain S.Arabia Bahrain Bahrain Bahrain Bahrain Kuwait

12/08 12/08 12/08 12/08 12/08 12/08 12/08

42,741 33,352 -19,770 -396,200 -511,110 -836,000 -1,274,823

220,167 19,852 277,093 -757,300 87,765 149,000 477,656

-80.59 68.00 NR NR NR NR NR

15,899,261

21,384,184

-25.65

TOTAL

Y-O-Y: year-on year; ROA: return on assets; NR: not ranked; *: Investcorp and Arcapita six months results to end December 2008; **: Arab Banking Corporation and Gulf Bank are included in the above table owing to their important size and asset ranking in the Top 50 Gulf banks.

May 2009 Gulf Business 65

Top 50 GCC banks TOP 50 GCC BANKS 2008 BY COUNTRY ($000s) RANK 2008

BANK NAME

COUNTRY

YEAR ENDED

CURRENT ASSETS 08

PREVIOUS ASSETS 07

Growth Y-O-Y (%)

Net Profit PROFIT

08 ROA (%)

Bahrain Bahrain Bahrain Bahrain Bahrain Bahrain Bahrain Bahrain Bahrain Bahrain

12/08 12/08 12/08 12/08 12/08 12/08 12/08 12/08 12/08 12/08

28,486,000 25,033,500 23,582,727 7,645,173 5,744,788 5,409,840 5,380,426 4,456,525 3,794,222 3,674,617

32,744,000 29,954,000 23,049,852 8,651,946 5,550,424 5,063,060 4,078,789 5,137,355 4,061,109 4,766,327

-13.00 -16.43 2.31 -11.64 3.50 6.85 31.91 -13.25 -6.57 -22.90

-836,000 -396,200 309,742 -19,770 71,645 92,390 85,162 42,741 156,087 -511,110

-2.93 -1.58 1.31 -0.26 1.25 1.71 1.58 0.96 4.11 -13.91

Kuwait Kuwait Kuwait Kuwait Kuwait Kuwait Kuwait Kuwait

12/08 12/08 12/08 12/08 12/08 12/08 12/08 12/08

43,389,462 37,390,574 17,542,553 15,271,812 13,877,578 10,769,362 7,943,262 3,840,426

41,817,072 32,226,799 18,619,048 15,711,696 10,430,575 10,846,740 8,191,644 3,476,960

3.76 16.02 -5.78 -2.80 33.05 -0.71 -3.03 10.45

933,419 619,333 -1,274,823 357,199 131,684 163,262 182,270 70,213

2.15 1.66 -7.27 2.34 0.95 1.52 2.29 1.83

Oman Oman

12/08 12/08

15,657,756 4,690,673

10,955,130 3,835,390

42.93 22.30

243,459 117,922

1.55 2.51

Qatar Qatar Qatar Qatar Qatar Qatar

12/08 12/08 12/08 12/08 12/08 12/08

41,739,527 16,836,515 10,712,160 9,212,622 4,888,568 4,605,625

31,417,766 12,471,780 8,257,748 5,861,475 4,279,226 2,799,854

32.85 35.00 29.72 57.17 14.24 64.50

1,003,171 464,121 259,957 451,124 116,941 250,701

2.40 2.76 2.43 4.90 2.39 5.44

S.Arabia S.Arabia S.Arabia S.Arabia S.Arabia S.Arabia S.Arabia S.Arabia S.Arabia S.Arabia S.Arabia

12/08 12/08 12/08 12/08 12/08 12/08 12/08 12/08 12/08 12/08 12/08

59,147,193 47,704,317 43,981,280 42,574,007 35,109,518 33,563,936 32,348,571 16,382,982 14,292,364 7,338,587 4,397,750

57,059,283 42,213,831 34,141,579 33,174,998 26,849,534 27,285,631 25,825,627 13,781,490 12,723,637 5,894,092 4,313,357

3.66 13.01 28.82 28.33 30.76 23.01 25.26 18.88 12.33 24.51 1.96

561,895 1,187,690 1,739,894 703,669 778,672 748,176 662,966 326,331 141,338 222,300 34,265

0.95 2.49 3.96 1.65 2.22 2.23 2.05 1.99 0.99 3.03 0.78

UAE UAE UAE UAE UAE UAE UAE UAE UAE UAE UAE UAE UAE

12/08 12/08 12/08 12/08 12/08 12/08 12/08 12/08 12/08 12/08 12/08 12/08 12/08

76,991,815 44,888,220 40,220,042 29,273,539 25,386,202 23,063,711 17,758,038 13,960,922 9,748,181 4,312,985 4296257 4225621 3795443

69,009,147 37,909,385 28,878,154 19,928,543 23,857,173 22,756,933 15,098,482 11,973,839 8,275,154 2,933,438 2,968,277 2,936,378 2,983,627

11.57 18.41 39.27 46.89 6.41 1.35 17.61 16.60 17.80 47.03 44.74 43.91 27.21

1,003,580 822,970 369,856 816,010 471,568 471,634 392,373 232,014 210,277 111,782 63,253 63,139 173,382

1.30 1.83 0.92 2.79 1.86 2.04 2.21 1.66 2.16 2.59 1.47 1.49 4.57

Bahrain 1 2 3 4 5 6 7 8 9 10

Arab Banking Corporation Gulf International Bank Ahli United Bank Awal Bank Bank of Bahrain and Kuwait National Bank of Bahrain Ithmaar Bank Arcapita* TIBC Investcorp* Kuwait

1 2 3 4 5 6 7 8

National Bank of Kuwait Kuwait Finance House Gulf Bank Commercial Bank of Kuwait Burgan Bank Al-Ahli Bank of Kuwait Bank of Kuwait and the Middle East Kuwait International Bank Oman

1 2

Bank Muscat National Bank of Oman Qatar

1 2 3 4 5 6

Qatar Qatar National Bank Commercial Bank of Qatar Doha Bank Qatar Islamic Bank Ahli Bank of Qatar Al Rayan Saudi Arabia

1 2 3 4 5 6 7 8 9 10 11

National Commercial Bank SAMBA Al Rajhi Banking and Investment Corporation Riyad Bank Saudi British Bank Banque Saudi Fransi Arab National Bank Saudi Hollandi Bank Saudi Investment Bank Bank Al Jazira Al Bilad

1 2 3 4 5 6 7 8 9 10 11 12 13

Emirates NBD National Bank of Abu Dhabi Abu Dhabi Commercial Bank First Gulf Bank Mashreqbank Dubai Islamic Bank Union National Bank Abu Dhabi Islamic Bank Commercial Bank of Dubai Bank of Sharjah Dubai Bank Sharjah Islamic Bank RAKBANK

UAE

Y-O-Y: year-on year; ROA: return on assets; NR: not ranked; *: Investcorp and Arcapita six months results to end December 2008.

66 Gulf Business May 2009