The UAE and Saudi banks were the largest lenders in the Middle East and North Africa (Mena) region with Dubai-based Emirates NBD topping with $55.3 billion in 2011, said a report.
Emirates NBD was followed by Qatar’s QNB with a total of $53.226 billion loans while National Bank of Abu Dhabi recorded loans of $43.423 billion, Forbes Middle East said.
Across the 75 banks analysed as part of the Forbes Middle East study of the largest and fastest growing banks in Arab stock markets, total loans reached an impressive figure of $855.7 billion. Ranking of the largest banks by loans was composed of twenty banks, with the UAE and KSA entering the list with six each.
Number of banks
The report findings also showed that the UAE has the highest number of banks present throughout the Mena. Findings revealed that the UAE has a total of 16 banks throughout the region accounting for 21 per cent of the total and securing it the top spot on this list. The UAE is followed by Saudi Arabia with 11 banks, representing 15 per cent of the total. Rounding out the top three is Bahrain bringing nine banks to the table that make up 12 per cent.
The ranking continued to break down as follows: Kuwait has a total of eight banks taking 11 per cent of the total, Jordan and Qatar each have seven banks constituting 9.5 per cent each, and Oman presents six banks with 8 per cent. Morocco and Lebanon each claim 5 per cent of the total, both entering the list with four banks, followed by Egypt with two banks, capturing 2.5 per cent of the geographical distribution. Finally, Palestine features in this geographical distribution list with a single bank.
This study included detailed research into 19 countries within the Mena region; 12 of which made it on to final lists. Due to political instabilities or non-disclosure of annual financial reports for the full year ending 31 December 2011, a number of countries were excluded from the rankings on this occasion. These countries include: Syria, Libya, Iraq, Mauritania, Yemen, Algeria, Sudan and Tunisia. As a result, out of a total of 110 banks, 75 were included in our ranking of 'The 75 Largest Banks in Arab Stock Markets,' with combined total assets reaching an impressive $1.394 trillion.
Assets were afforded the highest weighting amongst other criteria, as they provide the most accurate indication of bank size. With total assets of $82.995 billion, QNB secured the top spot on this ranking, followed by Al Rajhi Bank with total assets of $58.940 billion. The 75 banks involved also recorded combined operational income of $60.6 billion and combined net profits of $22.7 billion, thanks in part to the creation of new credit portfolios (loans) totaling $855.7 billion.
The GCC dominated this ranking with 57 banks, accounting for 76 per cent of the total and representing combined total assets of $1.158 trillion. Furthermore, in the GCC alone, deposits which are regarded as the lifeblood of banks and the backbone of credit portfolios, reached $780.3 billion from a total of $979.7 billion.
Fastest growing banks
The GCC demonstrates its dominance amongst the region’s fastest growing banks. Tracking banks’ annual growth using key indicators such as growth in profits, revenues, loans and deposits throughout the year is vital to analyzing performance, both of individual banks and the sector as a whole.
Alinma Bank tops the list of fastest growing banks with net profit growth of an incredible 2,737.7 per cent, translating to a figure of $115 million up from just $4 million the year before. QNB followed in second place with net profits of $2.06 billion, representing growth of 31.6 per cent.
Growth in deposits is one of the most important factors in increasing a bank’s profits, followed by loan growth. While taking a modest position of 67th in the ranking of the fastest growing banks, Palestine’s Arab Islamic Bank came out on top where deposit growth is concerned with an increase of 232 per cent, followed by Alinma Bank which achieved deposit growth of 113.8 per cent.
Again, the GCC proved its centrality to the Mena’s banking sector, with just two entries from Lebanon in twelfth and twentieth place disrupting the GCC’s dominance of the top 20 spots. As for the top ten, Qatar boasts three banks, Oman and Saudi enter the list with two banks each, and Kuwait, UAE and Bahrain each claim one.
The global financial crisis has demonstrated the growing popularity of Islamic banking, which is increasingly regarded as more trustworthy and stable than its conventional banking counterparts. With figures to support this, a recent report by Ernst & Young expects Mena’s Islamic banking industry to reach $990 billion by 2015. Detailed research led by Forbes revealed total Islamic banking assets exceeding $293 billion across 18 banks.
Saudi led the way in 2011 entering with five banks boasting combined total assets of $123.4 billion. Presiding over the list is Al-Rajhi Bank with total assets of $58.94 billion followed by the Saudi British Bank with $36.991 billion. Joint second in terms of banks per country entering this ranking are Qatar, UAE and Bahrain recording three banks each.
Largest banks by deposits
The top twenty largest banks by deposits record a total of $54.922 billion. The Mena region amassed a grand total of $979.7 billion in deposits for 2011 from across the 75 banks involved in this study. The GCC was the dominant player in this regard, contributing $780.3 billion which amounts to 80 per cent of the total. Qatar’s QNB topped our list, with deposits of $54.922 billion for the year. Emirates NBD came in second recording deposits of $52.629 billion, followed in third place by Al Rajhi Bank with total deposits of $46.238 billion. Out of the twenty banks on the list, Saudi dominated in terms of number of entries, with a total of six banks.