The UAE remained in control of the largest Arab banking sector at the end of 2011, accounting for nearly a third of the combined bank assets in the Gulf countries, according to a regional bank study.After dominating regional banks, Dubai-based Emirates NBD (ENBD) retreated to the third place in terms of assets, which stood at around $77.5 billion at the end of 2011, said the study by Qatar National Bank (QNB).
QNB moved ahead to the first rank with assets of about $82.9 billion, followed by National Commercial Bank (NCB) of Saudi Arabia, with nearly $80.3 billion.The government-controlled National Bank of Abu Dhabi (NBAD) emerged as the fourth largest Gulf bank, with its assets standing at $69.6 billion.The report showed the UAE retained its position as having the largest banking sector, controlling nearly 31 per cent of the combined assets of the more than 150 banks in the six-nation Gulf Cooperation Council (GCC).
“The UAE banking sector accounts for 31 per cent of the GCC total and assets are over 122 per cent of GDP, the second highest ratio after Bahrain,” QNB said.“The sector has a low concentration as the three largest banks (ENBD, NBAD and Abu Dhabi Commercial Bank) account for 43 per cent of total assets.”
The report showed Saudi Arabia had the second largest bank asset base at the end of 2011, accounting for 28 per cent of the GCC’s total bank assets.It put the ratio at 13 per cent for Bahrain and Qatar, around 11 per cent for Kuwait and four per cent for Oman.
It showed total assets of GCC banks grew by 7.5 per cent in 2007-2011, far exceeding growth during 2003-2007 due to the huge loan growth brought about by rapid economic expansion and large capital investments.During 2011, the sector’s assets grew by nearly 6.1 per cent to a record high of about $1.46 trillion, nearly 106 per cent of GDP.
“The ratio, which provides a measure of the importance of the banking sector to the overall economy, is relatively low for most GCC countries compared with some major advanced economies,” QNB said.“Bahrain is an exception, which has skewed the overall GCC ratio. It has one of the highest ratios of banking assets to GDP, due to a large presence of wholesale banks which account for 66 per cent of total banking sector assets.”
As for individual banks, the report showed QNB made the highest net profits in the region last year, with around $2.06bn. It was followed by the Saudi Al Rajhi Bank group with about $1.97bn. NCB recorded the third largest earnings of $1.6bn while the profits stood at $1.15bn for the Saudi American Bank, $1.09 billion for National Bank of Kuwait and almost the same income for NBAD and Abu Dhabi-based First Gulf Bank.
The report showed QNB also had the largest capital of around $11.5 billion at the end of 2011, followed by ENBD with about $9.5bn, NCB with nearly $9.1bn and Al Rajhi with $8.8bn. Next to them are NBK, Riyadh Bank, NBAD, ADCB, Saudi British Bank and Alinma Bank of Saudi Arabia.ends