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THE BUSINESS GCC Top 50 Banks

Bottomed out? After a very difficult 2008 and equally painful 2009, it would seem the worst of the banking slump has passed and 2010 should offer a slight recovery, DARREN STUBING reports.

2009

proved to be another difficult year for the Gulf Cooperation Council (GCC) banking sector with the aftermath from the global financial crisis still heavily impacting income lines and balance sheets. Banking profitability in the region was once again weaker, mainly due to much higher provisioning charges connected to loan assets as well as securities, investments and real estate assets. Loan credit defaults continued to rise due to both corporate and retail exposures whereas asset values for some banks

had to continue to be written down, particularly those linked to the property sector. The latter was again under pressure in 2009, as demand remained extremely weak and many prominent developments remained on hold. In a circular connection, companies could not continue their development activities as many were not able to renew existing facilities or obtain new credit as banks reined in their exposures. Generally, the economies of the GCC states remained robust, with the price of oil improving from the sharp falls in

the previous year, and the oil price was at a high average level for 2009. This helped to support government and business positions during the year. For the second consecutive year, net profit for the top 50 GCC banks fell in 2009. The Gulf’s largest banks recorded a fall of 12.5 per cent last year, although the fall was lower than the significant decrease of 26 per cent in aggregated net profit in 2008. Once again, very large losses were notable at a handful of banks, including Gulf Finance House and Ithmaar Bank, as well sharp falls May 2010 gulfbusiness.com

37


THE BUSINESS GCC Top 50 Banks

at a number of banks, including Commercial Bank of Kuwait, Bank Al Jazira, Saudi Hollandi Bank and Abu Dhabi Islamic Bank. Kuwait’s Gulf Bank recorded another loss in 2009 but was much lower than the huge loss seen in 2008, which was due to derivative positions. Overall, well over one-half of the banks saw a fall in net profit in 2009, and hence any recovery remained on hold. Despite the much weaker profitability and earnings, generally the financial positions of most banks strengthened as asset growth was moderate with management aiming to either improve and/or maintain asset quality through restricting balance sheet growth and helping liquidity. In addition, increasing capital adequacy was seen through raising shareholders’ equity. The Gulf’s top 50 banks’ consoli-

in 2009, and now ranks 35th in terms of capital and 42nd in assets.The other new entrant in 2009 was the Albaraka banking group, which has a diverse banking asset base across the region and beyond. It remained profitable in 2009. Despite challenges, many UAE banks also saw good rates of growth in assets in 2009. These banks included National Bank of Abu Dhabi, First Gulf Bank, Union National Bank, RAK bank, and Abu Dhabi Islamic Bank. For the Kingdom of Saudi Arabia, the performance in terms of asset growth was more mixed, with good growth seen at National Commercial Bank, the second largest bank in the GCC in terms of both assets and shareholders equity. However, a number of Saudi banks saw a fall in assets, in part reflecting cautious credit management,

Overall, UAE banks have the most representatives amongst the top 50 list with 13 names in the total assets table. dated assets rose by just 4 per cent in 2009 to fractionally over $1.05 trillion. The growth compares to 15 per cent in 2008 and 35 per cent in 2007. Total equity for the GCC 50 banks grew by a higher 13 per cent in 2009, to $138 billion. The percentage increase in equity in 2009 was higher than the 11 per cent seen in 2008. Overall, capital adequacy improved for the sector in 2009. Two high profile casualties of the financial crisis, Bahrain-based The International Banking Corporation and Awal Bank, the two institutions linked to the Saudi-based Saad Group, disappeared from the GCC 50 list in 2009. Both were caught in the shift and tightening in liquidity and funding markets but the overall collapse of the banks remains under investigation. By country, Qatari banks enjoyed the best growth in terms of assets in 2009, reflecting the robust performance of the domestic economy. Noted increases in assets were particularly led by the newer Qatari banks, including Al Rayan and Al Khalij Commercial Bank. The latter was a new entrant in the GCC 50 banks

38

gulfbusiness.com May 2010

particularly in the light of some high profile corporate collapses in the Kingdom. NCB was the stand out in terms of net profit improvement. On the back of the fall in net profit in 2009, profitability for the GCC 50 banks was lower once again. The return on as-

GCC 50 Banks – Return on Equity (%) 25

20

15

10

5

0

2005

2006

2007

2008

2009

sets for the top 50 GCC banks in 2009 was 1.51 per cent against 1.53 per cent in 2008 and a higher 2.42 per cent in 2007. However, including the large loss at Gulf Finance House (see chart), the return on assets in 2009 was a lower 13.7 per cent for the overall group. Return on equity fell more sharply in 2009, in part reflecting the increases in equity at many banks during the year. The return on equity for the GCC 50 banks was a low 11.1 per cent in 2009, down from a level of 13.7 per cent, and 19.4 per cent in 2007. Previously, the GCC financial institutions were amongst 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. For the first time, the UAE’s Emirates NBD emerged as the largest bank in terms of both assets and equity in the GCC in 2009. Following a 24 per cent rise in equity, Emirates NBD rose to rank first for capital from a previous position of third. Its profitability performance was still more than respectable given the operating environment, but a 9 per cent decline in net profit saw it fall to sixth place from third in terms of net profit. Once again, Saudi Arabia’s Al Rajhi Banking and Investment Corporation was by far the largest bank in the GCC in terms of net profit, rising marginally by 4 per cent in the year to $1.8 billion. Its return on assets remained one of the highest at 4.11 per cent. In terms of this yardstick, the most profitable bank amongst the GCC 50 is Qatar’s Al Rayan Bank at a very high 5.25 per cent, followed closely by UAE’s RAK bank at 5.21 per cent. Other very profitable banks included Qatar Islamic Bank at 3.94 per cent return on assets. Although a good turn around was seen at Bahrain-headquartered Arab Banking Corporation, which achieved net profit of $154 million in 2009 following a loss of $836 million in 2008, a number of other Bahrain-based wholesale banks again experienced difficult years. Gulf Finance House recorded a massive loss


THE BUSINESS GCC Top 50 Banks

Uncertainty around non-performing loans

M

uch of the weakness in the region’s profit performance in 2009 was unsurprisingly connected to sharply higher non-performing loans (NPLs), and asset value writedowns, and connected loan loss provision charges. The deteriorating loan asset quality portfolios were seen throughout the region but there were variations. Banks saw bad debt increases following a number of large financial collapses, including those of Awal Bank and the International Banking Corporation and, in turn, related exposures to the Saad and Al Gosaibi groups of Saudi Arabia. GCC bank exposure to the troubled groups was well in excess of $10 billion, including $5 billion to Saudi banks and $3 billion to UAE banks. Dubai World’s debt issues and restructuring added to the

of $728 million, connected to the need to make hefty provisions relating to assets where values have fallen sharply, including those linked to real estate. Ithmaar bank saw a loss of $233 million in 2009, reflecting provision impairments and also a large fall in income from investment properties. The investment bank Arcapita also recorded a loss of $191 million as at end December 2009, reflecting difficult trading conditions, whilst Gulf International Bank saw its third consecutive year loss. Although much lower than the loss of $396 million seen in 2008, GIB’s loss of $153 million was still hefty, and was due to loan provision charges and weaker net interest income. The latter reflects the bank’s strategy of de-risking the balance sheet and reducing the loan portfolio. Despite the losses, GIB maintains a high capital adequacy ratio and good liquidity. The dominance of the largest 20 banks remained stable in 2009, with the largest 20 Gulf banks comprising 75 per cent of the combined asset base. By profit however, the largest 20 represented 96 per cent of total net profit but this was in part influenced by the fact that nine banks in the GCC 50 recorded losses in 2009. The aggregated return on

problems, as did the very sharp downturn in the Dubai property market in general, causing higher non-performing loans for banks in the region. The significant downturn in the real estate sector in the GCC also raised loan default levels for banks. This included exposures to both real estate companies and developers but also to individuals. Retail impairments for banks in 2009 also increased. The impact of rising bad loans has been widespread but some have suffered more than others. The Kuwaiti banking sector experienced a very sharp rise in NPLs in 2009, reflecting chiefly commercial and corporate loan defaults linked to investment companies and real estate exposure. Oman and Bahrainibased banks also saw higher NPLs and provisioning. This was the case in Qatar,

but here the government’s decision to acquire real estate financing exposure reduced the overall rise. Overall, for the GCC sector, NPLs doubled to around 6 per cent of gross loans in 2009 but there is regional variation, with lower levels seen for example in Qatar and higher levels in Kuwait. The 6 per cent level is likely to rise in the first half of 2010 but the flow of new NPLs is expected to slow. The strictness and uniformity of impairment and non-performing classification across banks is an issue and some may still need to classify certain exposures. On the positive side, most GCC banks have made a good level of provisions against bad loans and the coverage level is considered solid. However, as seen, the provisioning hit bank profitability.

assets for the top 20 banks is higher, at 1.78 per cent, than that of the 50 banks, indicating a broader base of banking operations and generally less reliance on wholesale banking activities. Overall, UAE banks have the most representatives amongst the top 50 list with 13 names in the total assets table. This was also the case in shareholders’ equity and net profit. Through the support of the government, a number of banks, including First Gulf Bank and National Bank of Abu Dhabi, saw strong rises in equity.

For the GCC banking system, 2009 was again a very difficult year and the period over the past two years has been extremely challenging. There have been high profile casualties and a number of other banks have recorded large losses through problematic exposures, both on and off-balance sheets, and some are still going through restructuring in terms of operations and strategy. Despite the noted fall in profitability, most banks have been able to either maintain or improve their financial

For the first time, the UAE’s Emirates NBD emerged as the largest bank in terms of both assets and equity in the GCC in 2009. Reflecting still difficult trading conditions, problematic exposures to companies and investment houses, as well as continued weakness in the property sector, Kuwaiti banks had another weak year with all Kuwaiti banks in the GCC 50 seeing weaker net profit in 2009, and many by hefty percentages. That said, the flagship Kuwaiti bank, National Bank of Kuwait, saw net profit down by only 1 per cent.

profiles through capital injections and de-risking the balance sheet. Liquidity is still tight but has nonetheless recorded some improvement more recently. 2010 certainly will not be an easy year for the GCC banking sector and profitability is a long way off the halcyon period of a few years back, but the worst of the downturn may have passed and this year should be one of recovery. gb@motivate.ae May 2010 gulfbusiness.com

39


THE BUSINESS GCC Top 50 Banks Top 50 GCC BANKS 2009 ranked by Total Assets ($000s) Rank 2009

2008 Rank

BANK NAME

Country

Year Ended

Current Assets 09

Previous Assets 08

1

1

Emirates NBD

UAE

12/09

76,723,837

76,991,815

2

2

National Commercial Bank

S.Arabia

12/09

68,810,650

59,147,193

3

4

National Bank of Abu Dhabi

UAE

12/09

53,636,109

44,888,220

4

3

SAMBA

S.Arabia

12/09

49,594,533

5

8

Qatar National Bank

Qatar

12/09

6

7

Riyad Bank

S.Arabia

7

5

Al Rajhi Banking and Investment Corporation

8

6

9

9

Growth Y-O-Y (%)

Net Profit

09 ROA (%)

-0.35

910,772

1.18

16.34

1,080,012

1.83

19.49

822,871

1.83

47,704,317

3.96

1,217,244

2.55

49,198,605

41,739,527

17.87

1,149,099

2.75

12/09

47,156,751

42,574,007

10.76

810,138

1.90

S.Arabia

12/09

45,641,110

43,981,280

3.77

1,809,073

4.11

National Bank of Kuwait

Kuwait

12/09

44,715,940

43,389,462

3.06

923,735

2.13

Abu Dhabi Commercial Bank

UAE

12/09

43,618,000

40,220,042

8.45

-139,600

-0.35

10

10

Kuwait Finance House

Kuwait

12/09

39,354,110

37,390,574

5.25

250,331

0.67

11

14

First Gulf Bank

UAE

12/09

34,160,800

29,273,539

16.70

901,800

3.08

12

11

Saudi British Bank

S.Arabia

12/09

33,907,547

35,109,518

-3.42

543,288

1.55

13

12

Banque Saudi Fransi

S.Arabia

12/09

32,232,587

33,563,936

-3.97

659,717

1.97

14

13

Arab National Bank

S.Arabia

12/09

29,485,743

32,348,571

-8.85

633,574

1.96

15

15

Arab Banking Corporation

Bahrain

12/09

25,965,000

28,486,000

-8.85

154,000

0.54

16

16

Mashreq Bank

UAE

12/09

25,761,487

25,386,202

1.48

289,828

1.14

17

18

Ahli United Bank

Bahrain

12/09

23,573,983

23,582,727

-0.04

226,086

0.96

18

19

Dubai Islamic Bank

UAE

12/09

22,971,191

23,063,711

-0.40

330,322

1.43

19

20

Union National Bank

UAE

12/09

20,616,831

17,758,038

16.10

315,155

1.77

20

27

Abu Dhabi Islamic Bank

UAE

12/09

17,461,581

13,960,922

25.07

21,260

0.15

21

21

Gulf Bank

Kuwait

12/09

16,434,821

17,542,553

-6.31

-97,256

-0.55

22

17

Gulf International Bank

Bahrain

12/09

16,207,700

25,033,500

-35.26

-152,600

-0.61

23

23

Saudi Hollandi Bank

S.Arabia

12/09

15,801,780

16,382,982

-3.55

23,774

0.15

24

22

Commercial Bank of Qatar

Qatar

12/09

15,724,927

16,836,515

-6.60

417,996

2.48

25

24

Bank Muscat

Oman

12/09

15,196,716

15,657,756

-2.94

191,476

1.22

26

28

Burgan Bank

Kuwait

12/09

14,183,212

13,877,578

2.20

71,381

0.51

27

26

Saudi Investment Bank

S.Arabia

12/09

13,406,050

14,292,364

-6.20

144,029

1.01

28

-

Albaraka

Bahrain

12/09

13,166,277

10,920,288

20.57

167,386

1.53

29

30

Doha Bank

Qatar

12/09

12,620,027

10,712,160

17.81

267,106

2.49

30

25

Commercial Bank of Kuwait

Kuwait

12/09

12,455,559

15,271,812

-18.44

527

0.00

31

32

Qatar Islamic Bank

Qatar

12/09

10,774,403

9,212,622

16.95

362,718

3.94

32

29

Al-Ahli Bank of Kuwait

Kuwait

12/09

10,275,378

10,769,362

-4.59

135,715

1.26

33

31

Commercial Bank of Dubai

UAE

12/09

10,022,630

9,748,181

2.82

218,895

2.25

34

35

Bank Al Jazira

S.Arabia

12/09

8,013,634

7,338,587

9.20

7,352

0.10

35

33

Bank of Kuwait and the Middle East

Kuwait

12/09

7,833,016

7,943,262

-1.39

49,541

0.62

36

42

Al Rayan

Qatar

12/09

6,618,327

4,605,625

43.70

241,607

5.25

37

36

Bank of Bahrain and Kuwait

Bahrain

12/09

6,061,853

5,744,788

5.52

93,145

1.62

38

37

39 40

38 39

National Bank of Bahrain Ithmaar Bank

Bahrain Bahrain

12/09 12/09

5,632,320 5,213,861

5,409,840 5,380,426

4.11 -3.10

113,890 -233,369

2.11 -4.34

Ahli Bank of Qatar

Qatar

12/09

5,061,608

4,888,568

3.54

82,446

1.69

41

45

Bank of Sharjah

UAE

12/09

4,921,486

4,312,985

14.11

129,563

3.00

42

-

Al Khalij Commercial Bank

Qatar

12/09

4,807,709

3,279,702

46.59

45,897

1.40

43

46

Dubai Bank

UAE

12/09

4,739,828

4,296,257

10.32

-79,194

-1.84

44

40

National Bank of Oman

Oman

12/09

4,670,700

4,690,673

-0.43

54,800

1.17

45

49

RAK Bank

UAE

12/09

4,664,201

3,795,443

22.89

197,861

5.21

46

44

Al Bilad

S.Arabia

12/09

4,654,528

4,397,750

5.84

-66,402

-1.51

47

47

Sharjah Islamic Bank

UAE

12/09

4,352,738

4,225,621

3.01

70,881

1.68

48

43

Arcapita

Bahrain

12/09

4,009,970

4,456,525

-10.02

-190,700

-4.28

49

48

Kuwait International Bank

Kuwait

12/09

3,950,584

3,840,426

2.87

-28,529

-0.74

50

-

Bank Dhofar

Oman

12/09

3,862,133

3,437,961

12.34

65,956

1.92

Y-O-Y: year-on year; ROA: return on assets; NR: not ranked; *: Investcorp and Arcapita six months results to end December 2009.

40

gulfbusiness.com May 2010


THE BUSINESS GCC Top 50 Banks Top 50 GCC BANKS 2009 ranked by Total Capital ($000s) Rank 2008 BANK NAME Country Year Current 2009Takaful Rank Endedwritten Assets 09 contributions as % of total premiums 1 3 Emirates NBD UAE 12/09 8,711,347 2

1

National Commercial Bank

S.Arabia

12/09

7,834,225

Previous Assets 08

Growth Y-O-Y (%)

Net Profit

09 ROA (%)

7,023,233

24.04

910,772

10.46

7,342,800

6.69

1,080,012

13.79

3

2

Al Rajhi Banking and Investment Corporation

S.Arabia

12/09

7,683,295

7,208,480

6.59

1,809,073

23.55

4

4

Riyad Bank

S.Arabia

12/09

7,548,171

6,850,787

10.18

810,138

10.73

5

5

National Bank of Kuwait

Kuwait

12/09

6,369,870

5,684,240

12.06

923,735

14.50

6

9

First Gulf Bank

UAE

12/09

6,235,400

4,524,806

37.80

901,800

14.46

7

7

8

11

SAMBA

S.Arabia

12/09

6,015,357

5,349,831

12.44

1,217,244

20.24

National Bank of Abu Dhabi

UAE

12/09

5,569,637

3,913,906

42.30

822,871

14.77 20.97

9

8

Qatar National Bank

Qatar

12/09

5,479,240

4,571,059

19.87

1,149,099

10

6

Kuwait Finance House

Kuwait

12/09

5,458,190

5,655,422

-3.49

250,331

4.59

11

10

Abu Dhabi Commercial Bank

UAE

12/09

5,197,400

4,333,013

19.95

-139,600

-2.69

12

12

Banque Saudi Fransi

S.Arabia

12/09

4,210,918

3,751,770

12.24

659,717

15.67

13

13

Arab National Bank

S.Arabia

12/09

3,870,470

3,379,013

14.54

633,574

16.37

14

14

Saudi British Bank

S.Arabia

12/09

3,487,392

3,102,355

12.41

543,288

15.58

15

17

Commercial Bank of Qatar

Qatar

12/09

3,294,975

2,740,578

20.23

417,996

12.69

16

15

Mashreq Bank

UAE

12/09

3,225,564

2,908,358

10.91

289,828

8.99

17

20

Union National Bank

UAE

12/09

2,904,334

2,095,297

38.61

315,155

10.85

18

19

Ahli United Bank

Bahrain

12/09

2,581,431

2,394,777

7.79

226,086

8.76

19

21

Arab Banking Corporation

Bahrain

12/09

2,581,000

2,088,000

23.61

154,000

5.97

20

22

Qatar Islamic Bank

Qatar

12/09

2,470,536

1,961,794

25.93

362,718

14.68

21

16

Dubai Islamic Bank

UAE

12/09

2,447,084

2,834,149

-13.66

330,322

13.50

22

25

Saudi Investment Bank

S.Arabia

12/09

1,985,759

1,762,293

12.68

144,029

7.25

23

28

Abu Dhabi Islamic Bank

UAE

12/09

1,946,740

1,536,684

26.68

21,260

1.09

24

26

Bank Muscat

Oman

12/09

1,847,575

1,630,053

13.34

191,476

10.36

25

23

Gulf International Bank

Bahrain

12/09

1,779,400

1,925,500

-7.59

-152,600

-8.58

26

-

Albaraka

Bahrain

12/09

1,736,845

1,550,161

12.04

167,386

27

27

Al Rayan

Qatar

12/09

1,635,598

EXPLAINING 1,563,126 4.64

9.64

ISLAMIC 241,607

14.77

267,106

16.50

28

31

Doha Bank

Qatar

12/09

1,618,656

INSURANCE 1,349,287 19.96

29

24

Commercial Bank of Kuwait

Kuwait

12/09

1,526,953

1,763,805 -13.43 527 0.03 akaful looks to avoid the 1,524,040 -1.20 23,774 1.58 religiously problematic aspects of 1,263,401 17.44 71,381 4.81 conventional risk management 1,282,185 13.69 218,895 15.02 services by separating shareholder 1,401,325 1.99 -190,700 funds from policyholder funds. -13.34 131,606 973.64 there is -97,256 -6.88 Through Takaful a

30

29

Saudi Hollandi Bank

S.Arabia

12/09

1,505,820

31

34

Burgan Bank

Kuwait

12/09

1,483,714

32

33

Commercial Bank of Dubai

UAE

12/09

1,457,755

33

30

Arcapita

Bahrain

12/09

1,429,268

34

-

Gulf Bank

Kuwait

12/09

1,412,967

35

-

Al Khalij Commercial Bank

Qatar

12/09

1,326,019

36

35

Bank Al Jazira

S.Arabia

12/09

1,199,214

37

37

Sharjah Islamic Bank

UAE

12/09

1,161,938

38

38

39 40

39 44

Al-Ahli Bank of Kuwait Bank of Sharjah

Kuwait UAE

12/09 12/09

1,144,937 1,116,267

41

36

Investcorp

Bahrain

12/09

959,976

Ithmaar Bank

Bahrain

12/09

937,399

42

41

Bank of Kuwait and the Middle East

Kuwait

12/09

821,064

43

42

Al Bilad

S.Arabia

12/09

802,572

44

49

RAK Bank

UAE

12/09

762,119

45

45

National Bank of Oman

Oman

12/09

650,400

46

47

National Bank of Bahrain

Bahrain

12/09

641,940

47

50

Bank of Bahrain and Kuwait

Bahrain

12/09

614,444

48

46

Kuwait International Bank

Kuwait

12/09

600,045

49

43

50

-

UGB

Bahrain

12/09

572,325

Ahli Bank of Qatar

Qatar

12/09

535,686

T

1,247,180 45,897 commitment6.32 to distribute technical3.46 profits to policyholders, and 1,236,480 -3.01 7,352 0.61 investment in1.48 non-Shari’ah compliant 1,145,007 70,881 6.10 assets is studiously avoided. 1,107,837 3.35 135,715 It is 11.85 also based on the principle of mutual 1,047,651 6.55 129,563 11.61 assistance and voluntary contribution 708,196 35.55 60,193 6.27 – where risk is shared collectively and 1,149,351 -18.44 -233,369 -24.90 voluntarily by a group of participants. 861,702 Through the-4.72 payment of49,541 a voluntary6.03 856,757 -6.32 donation and the clear -66,402 definition of-8.27 the 566,691 197,861 25.96 type of loss,34.49 impermissible elements 641,301 1.42 54,800 8.43 such as ‘uncertainty’ and ‘excessive risk-taking’ 11.03 are removed from the 17.74 578,150 113,890 contract. Hence, 555,095 10.69 it overcomes 93,145 15.16 scholars’ objections to-28,529 traditional -4.75 585,106 2.55 forms of insurance, which are seen 4.17 as 815,251 -29.80 23,843 akin to gambling. 450,036 19.03 82,446 15.39

Y-O-Y: year-on year; ROA: return on assets; NR: not ranked; *: Investcorp and Arcapita six months results to end December 2009.

May 2010 gulfbusiness.com

41


THE BUSINESS GCC Top 50 Banks TOP 50 GCC BANKS TOTAL NET PROFIT ($000s) Rank 2009

Rank 2008

BANK NAME

Country

Year Ended

Net Profit 2009

Net Profit 2008

Growth Y-O-Y (%)

1

1

Al Rajhi Banking and Investment Corporation

S.Arabia

12/09

1,809,073

1,739,894

3.98

2

2

SAMBA

S.Arabia

12/09

1,217,244

1,187,690

2.49

3

4

4

13

Qatar National Bank

Qatar

12/09

1,149,099

1,003,171

14.55

National Commercial Bank

S.Arabia

12/09

1,080,012

561,895

92.21

5

5

National Bank of Kuwait

Kuwait

12/09

923,735

933,419

-1.04

6

3

Emirates NBD

UAE

12/09

910,772

1,003,580

-9.25 10.51

7

7

First Gulf Bank

UAE

12/09

901,800

816,010

8

6

National Bank of Abu Dhabi

UAE

12/09

822,871

822,970

-0.01

9

10

Riyad Bank

S.Arabia

12/09

810,138

703,669

15.13 -11.82

10

9

Banque Saudi Fransi

S.Arabia

12/09

659,717

748,176

11

11

Arab National Bank

S.Arabia

12/09

633,574

662,966

-4.43

12

8

Saudi British Bank

S.Arabia

12/09

543,288

778,672

-30.23

13

16

Commercial Bank of Qatar

Qatar

12/09

417,996

464,121

-9.94

14

17

Qatar Islamic Bank

Qatar

12/09

362,718

451,124

-19.60

15

14

Dubai Islamic Bank

UAE

12/09

330,322

471,634

-29.96

16

18

Union National Bank

UAE

12/09

315,155

392,373

-19.68 -38.54

17

15

Mashreq Bank

UAE

12/09

289,828

471,568

18

24

Doha Bank

Qatar

12/09

267,106

259,957

2.75

19

12

Kuwait Finance House

Kuwait

12/09

250,331

619,333

-59.58

20

25

Al Rayan

Qatar

12/09

241,607

250,701

-3.63

21

22

Ahli United Bank

Bahrain

12/09

226,086

309,742

-27.01

22

30

Commercial Bank of Dubai

UAE

12/09

218,895

210,277

4.10

23

32

RAK Bank

UAE

12/09

197,861

173,382

14.12

24

26

25

-

Bank Muscat

Oman

12/09

191,476

243,459

-21.35

Albaraka

Bahrain

12/09

167,386

201,013

-16.73

26

51

Arab Banking Corporation

Bahrain

12/09

154,000

-836,000

NA

27

35

Saudi Investment Bank

S.Arabia

12/09

144,029

141,338

1.90 -16.87

28

33

Al-Ahli Bank of Kuwait

Kuwait

12/09

135,715

163,262

29

39

Bank of Sharjah

UAE

12/09

129,563

111,782

15.91

30

40

National Bank of Bahrain

Bahrain

12/09

113,890

92,390

23.27

31

42

Bank of Bahrain and Kuwait

Bahrain

12/09

93,145

71,645

30.01

32

38

Ahli Bank of Qatar

Qatar

12/09

82,446

116,941

-29.50

33

36

Burgan Bank

Kuwait

12/09

71,381

131,684

-45.79

34

45

Sharjah Islamic Bank

UAE

12/09

70,881

63,139

12.26

35

37

National Bank of Oman

Oman

12/09

54,800

117,922

-53.53 -72.82

36

31

37

-

38

29

Bank of Kuwait and the Middle East

Kuwait

12/09

49,541

182,270

Al Khalij Commercial Bank

Qatar

12/09

45,897

28,455

61.30

United Gulf Bank

Bahrain

12/09

23,843

214,617

-88.89

39

21

Saudi Hollandi Bank

S.Arabia

12/09

23,774

326,331

-92.71

40

27

Abu Dhabi Islamic Bank

UAE

12/09

21,260

232,014

-90.84

41

28

Bank Al Jazira

S.Arabia

12/09

7,352

222,300

-96.69

42

20

Commercial Bank of Kuwait

Kuwait

12/09

527

357,199

-99.85

43

43

Kuwait International Bank

Kuwait

12/09

-28,529

70,213

NA

44

47

Al Bilad

S.Arabia

12/09

-66,402

33,352

NA

45

44

Dubai Bank

UAE

12/09

-79,194

63,253

NA

46

52

Gulf Bank

Kuwait

12/09

-97,256

-1,274,823

NA

47

19

Abu Dhabi Commercial Bank

UAE

12/09

-139,600

369,856

NA

48

49 46

Gulf International Bank Arcapita

Bahrain Bahrain

12/09 12/09

-152,600 -190,700

-396,200 42,741

NA NA

41

Ithmaar

Bahrain

12/09

-233,369

85,162

NA

49 50

Y-O-Y: year-on year; ROA: return on assets; NR: not ranked; *: Investcorp and Arcapita six months results to end December 2009; **: 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.

42

gulfbusiness.com May 2010


THE BUSINESS GCC Top 50 Banks Top 50 GCC BANKS 2009 ranked by Country ($000s) Rank 2008 BANK NAME 2009Takaful Rank contributions as % of total Bahrain 1 1 Arab Banking Corporation 2 3 Ahli United Bank 3 2 Gulf International Bank 4 Albaraka 5 5 Bank of Bahrain and Kuwait 6 6 National Bank of Bahrain 7 7 Ithmaar Bank 8 8 Arcapita Kuwait 1 1 National Bank of Kuwait 2 2 Kuwait Finance House 3 3 Gulf Bank 4 5 Burgan Bank 5 4 Commercial Bank of Kuwait 6 6 Al-Ahli Bank of Kuwait 7 7 Bank of Kuwait and the Middle East 8 8 Kuwait International Bank Oman 1 1 Bank Muscat 2 2 National Bank of Oman 3 Bank Dhofar Qatar 1 2 Qatar National Bank 2 3 Commercial Bank of Qatar 3 4 Doha Bank 4 5 Qatar Islamic Bank 5 Al Rayan 6 6 Ahli Bank of Qatar 7 Al Khalij Commercial Bank Saudi Arabia 1 1 National Commercial Bank 2 2 SAMBA 3 4 Riyad Bank 4 3 Al Rajhi Banking and Investment Corporation 5 5 Saudi British Bank 6 6 Banque Saudi Fransi 7 7 Arab National Bank 8 8 Saudi Hollandi Bank 9 9 Saudi Investment Bank 10 10 Bank Al Jazira 11 11 Al Bilad UAE 1 1 Emirates NBD 2 2 National Bank of Abu Dhabi 3 3 Abu Dhabi Commercial Bank 4 4 First Gulf Bank 5 5 Mashreq Bank 6 6 Dubai Islamic Bank 7 7 Union National Bank 8 8 Abu Dhabi Islamic Bank 9 9 Commercial Bank of Dubai 10 10 Bank of Sharjah 11 11 Dubai Bank 12 13 RAK Bank 13 12 Sharjah Islamic Bank

Year

Current

Previous Assets 08

Growth Y-O-Y (%)

Net Profit

09 ROA (%)

12/09 12/09 12/09 12/09 12/09 12/09 12/09 12/09

25,965,000 23,573,983 16,207,700 13,166,277 6,061,853 5,632,320 5,213,861 4,009,970

28,486,000 23,582,727 25,033,500 10,920,288 5,744,788 5,409,840 5,380,426 4,456,525

-8.85 -0.04 -35.26 20.57 5.52 4.11 -3.10 -10.02

154,000 226,086 -152,600 167,386 93,145 113,890 -233,369 -190,700

0.54 0.96 -0.61 1.53 1.62 2.11 -4.34 -4.28

12/09 12/09 12/09 12/09 12/09 12/09 12/09 12/09

44,715,940 39,354,110 16,434,821 14,183,212 12,455,559 10,275,378 7,833,016 3,950,584

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

3.06 5.25 -6.31 2.20 -18.44 -4.59 -1.39 2.87

923,735 250,331 -97,256 71,381 527 135,715 49,541 -28,529

2.13 0.67 -0.55 0.51 0.00 1.26 0.62 -0.74

12/09 12/09 12/09

15,196,716 4,670,700 3,862,133

15,657,756 4,690,673 3,437,961

-2.94 -0.43 12.34

191,476 54,800 65,956

1.22 1.17 1.92

12/09 12/09 12/09 12/09 12/09 12/09 12/09

49,198,605 15,724,927 12,620,027 10,774,403 6,618,327 5,061,608 4,807,709

41,739,527 17.87 1,149,099 16,836,515 -6.60 417,996 10,712,160 17.81 267,106 9,212,622 16.95 362,718 4,605,625 43.70 241,607 4,888,568 3.54 82,446 3,279,702 46.59 45,897 EXPLAINING ISLAMIC

12/09 12/09 12/09 12/09 12/09 12/09 12/09 12/09 12/09 12/09 12/09

68,810,650 49,594,533 47,156,751 45,641,110 33,907,547 32,232,587 29,485,743 15,801,780 13,406,050 8,013,634 4,654,528

59,147,193 16.34 1,080,012 1.83 the 47,704,317 akaful looks 3.96 to avoid 1,217,244 2.55 aspects1.90 of 42,574,007 religiously 10.76problematic 810,138 conventional 43,981,280 3.77risk management 1,809,073 4.11 35,109,518 services-3.42 543,288 1.55 by separating shareholder 33,563,936 659,717 1.97 funds from-3.97 policyholder funds. 32,348,571 -8.85 there633,574 1.96 Through Takaful is a 16,382,982 -3.55 23,774 commitment to distribute technical0.15 14,292,364 -6.20 144,029 1.01 profits to policyholders, and 7,338,587 7,352compliant 0.10 investment9.20 in non-Shari’ah 4,397,750 5.84 -66,402 It is -1.51 assets is studiously avoided.

12/09 12/09 12/09 12/09 12/09 12/09 12/09 12/09 12/09 12/09 12/09 12/09 12/09

76,723,837 53,636,109 43,618,000 34,160,800 25,761,487 22,971,191 20,616,831 17,461,581 10,022,630 4,921,486 4,739,828 4,664,201 4,352,738

also based on the principle of mutual 76,991,815 910,772 1.18 assistance-0.35 and voluntary contribution 44,888,220 19.49 1.83 – where risk is shared822,871 collectively and 40,220,042 -0.35 voluntarily 8.45 by a group-139,600 of participants. 29,273,539 16.70 3.08 Through the payment901,800 of a voluntary 1.48the clear 289,828 25,386,202 donation and definition of1.14 the 23,063,711 -0.40 330,322elements 1.43 type of loss, impermissible 17,758,038 16.10 315,155 1.77 such as ‘uncertainty’ and ‘excessive 13,960,922 25.07 21,260 risk-taking’ are removed from the 0.15 9,748,181 2.82 it overcomes 218,895 2.25 contract. Hence, 4,312,985 14.11 129,563 scholars’ objections to traditional 3.00 4,296,257 10.32 -79,194 -1.84 forms of insurance, which are seen as 3,795,443 22.89 197,861 5.21 akin to gambling. 4,225,621 3.01 70,881 1.68

Ended Assets 09 premiums written

2.75 2.48 2.49 3.94 5.25 1.69 1.40

INSURANCE

T

Y-O-Y: year-on year; ROA: return on assets; NR: not ranked; *: Investcorp and Arcapita six months results to end December 2009.

May 2010 gulfbusiness.com

43


Gulf Business May 2010 | Top 50 Banks