Top 10 GCC Banks
Banks in the GCC are slowly starting to recover following the economic crisis of recent years. As timely actions by Government, central banks and individual banks softened the blow and ushered in a more rapid return to profitability.These top 10 GCC banks must now focus on improving efficiencies and tackling their remaining challenges.
The top 10 banks in GCC had assets worth more than $612 billion last year:
1. Qatar National Bank (QNB)
QNB’s assets grew by 35 per cent year-on-year to $83 billion in 2011, while net profits also rose by 32 per cent to just over $2 billion.
2. National Commercial Bank (NCB)
Saudi Arabia’s NCB came second with $80 billion in assets, an increase of 6.6 per cent from 2010. The bank’s net profit reached $1.6 billion in 2011.
ENBD, the UAE’s largest bank by assets, was pushed to the third spot from the first position last year after its assets reduced 0.5 per cent to $77.4 billion. Net profit also dropped to $676 million.
4. National Bank of Abu Dhabi (NBAD)
NBAD’s assets rose significantly in 2011 to $69.6 billion, up 20.9 per cent from $57.5 billion in 2010.
5. Al Rajhi Banking Corporation
The second bank from Saudi Arabia on the list, Al Rajhi also saw its assets growing by 19.4 per cent, from $49.2 billion in 2010 to $58.8 billion last year.
The Saudi Arabian bank dropped one spot from last year due to a weak increase in assets. Samba’s assets reached $51 billion in 2011, a 2.8 per cent year-on year rise.
7. National Bank of Kuwait (NBK)
NBK, Kuwait’s biggest bank, jumped up from the ninth spot last year as its assets rose six per cent to $48.9 billion in 2011.
8. Kuwait Finance House
Kuwait Finance House’s assets rose 7.71 per cent from 2010 to reach $48.3 billion last year.
9. Riyad Bank
With slightly lower assets than Kuwait Finance House, Riyad Bank dropped one spot this year. Its assets rose 4.4 per cent year-on-year to reach $48.2 billion in 2011.
10. Abu Dhabi Commercial Bank (ADCB)
ADCB’s assets fell 1.85 per cent year-on-year in 2011 to reach $47.6 billion, pushing the bank three spots down from last year. However, ADCB’s profit soared by over 600 per cent in 2011, aided by higher net interest income and lower provisioning charges. ADCB’s results also benefitted from the sale of its stake in RHB Capital Berhad, which resulted in a major gain of Dhs1.3 billion.
The following are several reasons why profitable growth in the GCC banking sector continues to rise:
- Favourable demographics – The young wealthy population has fueled demand for more banking products
- Credit hungry economy – Rising oil revenues and government investments in diversification have helped the region grow
- Low banking penetration – Despite the credit hungry environment, the GCC banking system has lower penetration levels that its Western counterparts
- Competition – Historically, GCC countries have been cautious in opening up their banking sector to foreign banks
- Lower costs – Labor intense operations and limited geographical spread have helped GCC banks keep down operating expenses and capital expenditure
- Easier access to cheap funds – Governments have substantial ownership in most GCC banks, helping some banks gain access to stable deposits at lower costs than would otherwise be possible.
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