Arab banks: What are the latest top 10 rankings in 2023?

While banks in oil-exporting countries like Saudi Arabia and the UAE continued to flourish, banks in other parts of the region experienced decreases in dollar terms, aligning more closely with global trends due to challenging economic conditions and depreciating local currencies. According to a new report from The Banker, banks in the Gulf Cooperation Council (GCC) countries witnessed in 2022 a cumulative 7.7 percent increase in Tier 1 capital, whereas banks in the rest of the region saw a 5 percent drop during the same period, with similar disparities in asset and profit growth.

Below is the updated list of the Banker’s Top 100 Arab Banks for 2023:

• Saudi National Bank (Saudi Arabia) 
• Qatar National Bank (Qatar)
• Alrajhi Bank (Saudi Arabia)
• Emirates NBD (UAE)
• First Abu Dhabi Bank (UAE)
• Riyad Bank (Saudi Arabia)
• Abu Dhabi Commercial Bank (UAE)
• Saudi British Bank (SABB)(Saudi Arabia)
• National Bank of Kuwait (Kuwait)
• Kuwait Finance House (Kuwait) 

Saudi

Saudi banks thrived in 2022, benefiting from a surge in corporate lending driven by an oil-revenue windfall resulting from Russia’s invasion of Ukraine. The riyal’s peg to the dollar helped maintain low inflation levels. 

In this year’s ranking, Saudi banks accounted for 25 percent of assets and approximately one-third of Tier 1 capital, with four banks placed in the top 10. While the retail mortgage boom that fueled unprecedented asset growth in the past five years in Saudi Arabia is slowing down, banks benefited from increased public spending due to a surge in oil revenues. Projects like Neom and the Red Sea Project drove strong demand for corporate credit.

Saudi National Bank (SNB) maintains its position as the largest Arab lender by Tier 1 capital in 2023, a rank it achieved in last year’s ranking. 

UAE

The UAE holds the second-largest banking market in the Arab world, following Saudi Arabia, with 18 lenders featured in this year’s Top 100 ranking, the highest number among all countries. After a relatively subdued performance in the previous ranking, UAE banks experienced a 5 percent increase in Tier 1 capital this year, with seven banks achieving double-digit growth in assets.

Emirates NBD led the pack in terms of Tier 1 capital growth, with an 11.9 percent rise in 2022. This surge propelled the Dubai-based bank to overtake First Abu Dhabi Bank (FAB) and become the country’s largest lender in the overall ranking, maintaining its fourth-place position. Although FAB slipped to fifth place in the overall ranking due to unchanged Tier 1 capital, it remains the UAE’s largest lender by assets, with an 11 percent growth in its asset base, driven by a 14 percent rise in deposits.

Emirati banks saw significant improvements in profitability in 2022, benefiting from favorable business conditions in the UAE.

Mashreqbank’s strong profitability contributed to its retention of the title of the UAE’s best-performing bank for the second consecutive year.

Kuwait

Despite a recent slowdown in merger and acquisition activity, the completion of the long-awaited deal between Kuwait Finance House (KFH) and Bahrain’s Ahli United Bank marked a significant milestone in the past year. The takeover, which had been under consideration since 2018 and faced delays due to the Covid-19 pandemic, signaled a rare cross-border merger in the Middle East.

This acquisition had a transformative impact on KFH, leading to a remarkable 51.7 percent increase in Tier 1 capital and a substantial 64 percent growth in assets. These figures represent the highest growth rates among any Arab bank with assets exceeding $1 billion. As a result, KFH climbed five places in the overall ranking, securing the 10th position. While it still lags just behind the ninth-ranked National Bank of Kuwait (NBK) in terms of Tier 1 capital, KFH surpassed its domestic rival to become the largest bank in Kuwait based on assets.

Furthermore, KFH ascended from third to first place in the country’s performance table, achieving top scores in categories such as growth, asset quality, liquidity, and leverage. NBK also experienced a rise from fourth to second place, earning high scores in return on risk, liquidity, profitability, and growth.

Qatar

In 2022’s ranking, although SNB surpassed Qatar National Bank (QNB) as the region’s largest bank by Tier 1 capital, QNB maintains its position as the Arab world’s largest bank by assets, with a significant lead of nearly $25 billion over second-placed FAB. Among Qatar’s banks, the smaller lenders outperformed their regional counterparts in this year’s ranking, with QNB being the only Qatari bank that did not improve its position in the Top 100.

For the second consecutive year, Qatar Islamic Bank (QIB), the second-largest bank in Qatar, claimed the top spot in the country’s performance ranking. It achieved the highest scores in metrics such as profitability, asset quality, return on risk, soundness, and leverage. Commercial Bank, the fourth-largest bank in Qatar, moved up from third to second place in the performance chart, primarily due to strong scores in operational efficiency, growth, and profitability.

Egypt

Egypt, the most populous Arab nation, was severely impacted by the Russia-Ukraine war. The country’s rapidly expanding yet fragile economy suffered from a collapse in foreign exchange reserves. Soaring inflation and currency devaluations dealt a blow to local banks, resulting in significant declines in headline metrics in dollar terms for the year.

In this year’s ranking, six out of the top 10 Egyptian banks recorded Tier 1 capital declines of over 20 percent for 2022.

Only Afreximbank, a Cairo-based development lender that experienced a surge in its capital base in 2022 due to a capital raising program. Other Egyptian banks in this year’s ranking witnessed a staggering 24.3 percent decrease in their Tier 1 capital in dollar terms. CIB Egypt, the largest private lender in the country, saw a slight increase in Tier 1 capital in local currency terms in 2022. However, when converted to dollars, it experienced a significant decline of 36.2 percent, ranking among the largest falls in the overall 2023 ranking.

Morocco

Moroccan lenders, the second-largest non-GCC banking market after Egypt, faced challenges due to the depreciation of the dirham against the dollar in 2022. However, the impact was relatively less severe compared to Egyptian banks. In this year’s ranking, all nine Moroccan banks experienced a decline in assets when measured in dollars, except for Crédit Immobilier et Hôtelier (CIH), which saw an improvement in Tier 1 capital.

Attijariwafa, the largest bank in the country, achieved positive results for the year. However, its Tier 1 capital weakened by 5.8 percent in dollar terms, causing a three-place drop to 25th in the overall ranking. Nevertheless, Attijariwafa excelled in Morocco’s performance assessment, securing the top position due to its exceptional scores in profitability, asset quality, operational efficiency, and return on risk. Groupe Banques Populaire, the second-largest bank in Morocco, ranked second in terms of performance, with strong scores in liquidity, soundness, and leverage.

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