Top 100 banks.
This month The Middle East proudly presents its annual Top 100 Middle Eastern banks ranking. This year--a particularly eventful one in the region's banking and finance--we have invited two highly regarded international economic experts, Neil Ford and Moin Siddiqi, to record their observations, based on the results of our specially commissioned rankings, global trends and patterns of international recovery. Their remarks provide a fascinating overview.
AFTER THE DOOM AND GLOOM OF THE GLOBAL financial crisis, our survey of the Top 100 Middle East Banks reveals a steady recovery among the region's financial institutions over the past 12 months. While the biggest banks in Saudi Arabia and the UAE continue to dominate the upper echelons of the table, the real story at the bottom end of the rankings, where much greater strength in depth is apparent than in our 2009 survey.
Saudi Arabia's National Commercial Bank (NCB) retains top spot with capital of $7.6bn, up from $7.3bn last year, but with an increased lead over its nearest rival. However, last year's second- and third-placed banks, Al Rajhi Bank and Riyadh Bank, also both of Saudi Arabia, have fallen down our ranking as Emirates NBD and First Gulf Bank of the United Arab Emirates (UAE) have climbed into second and fourth positions respectively. First Gulf Bank, in particular, has enjoyed a very successful year, with capital growth from $4.5bn in our 2009 survey to $6bn just 12 months later, helping to push the company six places up our table.
First Gulf Bank announced net profits of AED 1,707 million ($465 million) for the first half of 2010, 12% up on the same period last year. A spokesperson for the company commented: "The increase in revenue was largely attributed to the net interest and Islamic financing, which increased by 13% from AED 1,833 million ($499 million) in the first half of 2009 to AED 2,080 million ($566 million) in the first half of 2010." The company is also becoming increasingly active in project financing, forming part of the banking consortium that agreed to provide $1.1 billion financing to Abu Dhabi Emirates Steel Industries (ESI) in August, which will enable the firm to increase its steel production capacity from two million tonnes a year at present to three million tonnes a year by the end of 2011.
Another big climber is National Bank of Abu Dhabi (NBAD), which ranked 12th last year with capital of $4 billion, but which has now moved up to eighth position with $5.7 billion. Samba Financial Group has also moved into the top five this year but despite its fall from second to seventh position, Al Rajhi Bank remains the most profitable financial institution in the region, recording a profit of $1.8 billion in this year's table, up slightly on last year's $1.7 billion.
On the up
The only bank from a non-Gulf state to make it into the top 20 is Arab Bank of Jordan, which ranks tenth this year with capital of $4.7 billion, up on last year's $4.6 billion. However, the company's pre-tax income for the first six months of this year stood at $410 million, down from $452 million for the first half of 2009, although total revenues increased slightly from $899 million to $905 million over the same period. Arab Bank's executive chairman, Abdel Hamid Shoman, said that the fall in profits was "primarily due to the company's prudent policies against provisions, based on which, the Bank has booked additional provisions of $124 million against non-performing and watch list credits, in addition to the global economic conditions which led to lower interest rates on US dollar and other foreign currencies and the low volume of demand for banking facilities which led to a drop in the growth of the loan book".
With such great focus on the region's biggest banks, it is easy to overlook those companies that only just make it into our Top 100. Yet while most of the biggest financial institutions in the Middle East and North Africa have recorded fairly modest growth this year, the threshold for entry into our table has considerably increased. Ahli Bank of Qatar needed capital of just $310 million to take 100th position in our table last year but Jordan Kuwait Bank required $355 million to secure the same ranking this year, an increase of 14%, suggesting that the banking reforms of the past few years are beginning to pay dividends in several countries, with many new and established middle-sized financial institutions now making real inroads into their respective national markets. Conversely, the level of capital needed to reach the top ten or top 50 has hardly increased at all: the former has risen from $4.5 billion last year to $1.1 billion over the past 12 months.
As Table 1 indicates, the geographical spread of the Top 100 banks in the region has changed only marginally over the past 12 months. The UAE and Saudi Arabia continue to dominate the rankings, followed by Iran and Bahrain. Two Egyptian banks have left our rankings after several years of improvement for North Africa's best-represented nation, while both Kuwait and Jordan have added another bank to the ranks of their entries. More strikingly, however, four new Iranian banks have entered our table, although the country's highest-placed financial institution, Bank Saderat Iran, has been unable to improve on last year's 17th position. Nevertheless, the success of Iranian banks is remarkable given the restrictions on private enterprise in Iran and the range of economic sanctions that have been placed on the country by governments around the world.
Growing cross-border competition
Cross-border competition in the banking sector across the Middle East and North Africa has historically been rather limited. Protectionist measures have restricted the ability of national banks to set up operations in neighbouring states, thereby closing a wide range of potential opportunities for growth. While cross-border takeovers are still often subject to tight regulations, an increasing number of banks are now investing beyond the borders of their home markets.
For instance, NBAD announced plans in late August to expand its Egyptian operations from 28 to 50 branches. Qamber Ali Al Mulla, senior general manager of NBAD's international banking division, commented: "NBAD opened its first overseas branch in Cairo in 1975. Since then, Egypt remains an important and critical market for us as can be witnessed by our growth and future plans for the country. NBAD's aim is to be the number one Arab bank and therefore we will continue to look for opportunities in large Arab economies as well as other international markets." The company also has branches in other parts of Africa and in North America, although the operations of most Middle Eastern banks in Europe and North America are generally designed to serve their existing customers when overseas, rather than to target local residents.
Emirates NBD of the UAE is also expanding its retail operations in Saudi Arabia. In September, it became the first non-Saudi bank to offer electronic bill payment facilities for government services, although the facility is managed by the Saudi Arabian Monetary Agency (SAMA). Mohammed Al Hegelan, the bank's country manager for Saudi Arabia, says that the country is becoming an increasingly important market for its corporate, retail and Islamic banking and adds that the new service will help to place it "on a par with major local banks in the kingdom". Emirates NBD now appears to be an established presence in the upper reaches of our table but gained a listing on the Dubai Financial Market (DFM) as recently as October 2007, following the merger of Emirates Bank and National Bank of Dubai.
The other big trend in financial services is the well documented growth of Islamic banking. According to the Pan Arab Research Centre in Dubai, the sector is likely to grow even faster as the global economy picks up towards the end of this year. Figures from the Islamic Financial Services Board reveal that Shariah-compliant financing is growing by 15% a year and predicts that assets under management will reach $2.8 trillion in 2015. An analyst at the Pan Arab Research Centre, M. Shaharyar Umar, commented: "As cautious optimism returns, the banking sector is engaged in brand-image-building exercises and Ramadan offers the much-needed platform for these promotions." For example, Emirates NBD has relaxed payments on personal loans during Ramadan.
With or without turbulent economic conditions, new opportunities for cross-border investment and the international spread of Islamic banking are providing plenty of scope for growth. Such new frontiers should provide the impetus for new entrants into the sector to make their presence felt and offer innovative products and approaches in competition to the established banks that have long dominated our table. The sheer number of banks with capital of more than $100 million suggests that this process is already under way but it will only be when non-Gulf banks begin to challenge competitors based in oil-rich states that the region will begin to have geographical as well as numerical strength in depth.
Banking on swift recovery
THE MIDDLE EAST AND NORTH AFRICA (MENA) region has become a significant player in emerging-market banking over the past decade, as financial groups develop stronger capabilities in retail, corporate and investment banking. Premier institutions across the region merit praise for successfully avoiding the worst effects of the global financial crisis thanks to higher capital bases, the prudent regulatory oversight--focusing on risk management and sound corporate governance--as well as improved managerial and IT capabilities. The ability of most Arab banks to efficiently manage their assets and diversify their sources of income despite the downturn illustrates the industry's maturity.
The global liquidity tensions had an adverse impact on MENA, but there were no systemic disruptions. Despite some impairment of asset quality and lower earnings, major banks proved resilient, due to non-exposures to Western institutions in distress and exotic instruments, such as collateralised debt obligations (CDOs) or asset-backed securities index (ABX). Lenders depend on low-cost retail deposits for funding their activities, with only limited borrowing from global capital markets. Regional banks, with few exceptions, have low leverage and moderate loan-to-deposit ratios compared to their peers.
The Gulf financial systems--the bedrock of Arab banking--entered the global storm from a position of strength. This reflected prudent macro-economic policies and large buffers of external assets. The median capital adequacy ratio for the Gulf banking sector was 17.5% in 2009--well above the Basel II (8%) guidelines. "The banking system is very solid, very liquid and very well capitalised," said Muhammad Al Jasser, governor of the Saudi Arabian Monetary Agency (SAMA). Banks' capital was boosted by injections of public money in Qatar and UAE and private funds in Kuwait and Saudi Arabia.
However, non-performing loans (NPLs) increased in most countries (from a low base) due to a growth slowdown and weaker property prices. That, in turn, led to higher provisioning needs, thus hurting the sector's profitability. Kuwaiti banks fared the worst in the region, with bad assets reported at 9.7% of total loans, followed by UAE (4.6%), Bahrain (3.9%), Saudi Arabia (3-3%), Oman (2.8%) and Qatar (1.7%). Banks have ample reserves to absorb operating losses.
In Kuwait, sizeable losses by Gulf Bank over 2008-9 on derivatives transactions, coupled with heavy exposures to real estate, equities and the five defaulted Investment Companies served to exacerbate bad debt problems. In the UAE, the bulk of the increase in NPLs last year derived from the Central Bank's directives to reclassify loans to the defaulted Saudi conglomerates Al Saad and Al Gosaibi. For 2010, exposures to Dubai World (DW) will increase NPLs across the region.
Arab banks are reportedly holding $15bn of DW and related entities debt. According to Reuters, Abu Dhabi Commercial Bank remains heavily exposed, with $2.4 billion owed by DW, while exposures to the Saudi groups total $609m. Emirates NBD (also exposed to DW) boosted its Tier-1 capital following the issuance of securities worth $1 billion to the Investment Corporation of Dubai.
The total consolidated 2009 assets in The Middle East's Top 100 Banks rankings reached $1.83 trillion, up by a huge 131.5% on 2004, while aggregate Tier-1 capital (i.e. shareholders' equity) surged more than twofold to $175.83 trillion. MENA banking assets compare favourably with those in India ($1.21 trillion) and Russia ($1 trillion), but fall below $2.1 trillion in Central and Eastern Europe. The latter, however, contains mountainous bad debts. The  Gulf-based financial groups, led by Saudi Arabian, the UAE and Bahrain, accounted for 71% and 60%, respectively, of core capital and total banking assets.
The industry remains heavily concentrated; 35 premier banks hold about 60% of the region's banking assets or $1.12 trillion. The top-five lenders are Emirates NBD, National Commercial Bank (NCB), Bank Melli Iran, National Bank of Abu Dhabi and Arab Bank. The UK Banker's survey of 1,000 strongest banks ranked by Tier-1 capital in 2009 featured 106 MENA banks (compared to 80 in 2008). NCB led at number 126, followed by Emirates NBD (128), Riyadh Bank (138), First Gulf Bank (142), Samba Financial Group (144) and Al Rajhi Bank (146).
Some institutions in our survey report exceptionally strong capital positions (Tier-1 & 2). They include Export Development Bank of I ran (58%), Bank of Industry and Mine (39%), Boubyan Bank (31%), Al Salam Bank (29%), The Housing Bank for Trade and Finance (23%), National Bank of Bahrain (22%), Banque du Caire (21%), Qatar International Islamic Bank (20%), NCB (19%), Commercial Bank of Qatar (18.8%) and Arab Bank (17.9%) and Samba (17%).
Despite a turbulent year and increased bad debt provisions, most lenders registered decent 2009 earnings led by Al Rajhi ($1,815 million), Samba ($1,214 million), Qatar National Bank ($1,152 million), NCB ($1,077 million) and National Bank of Kuwait ($986 million). In fact, only seven reported losses--namely Bank Tejarat ($753 million), Gulf International Bank ($199 million) and Abu Dhabi Commercial Bank ($139 million).
Some banks in our survey rank strongly in terms of innovation and risk diversification. The world's number-one Islamic financier, Al Rajhi's asset quality is sound and return on equity (30.8%) is the highest of major Arab banks. According to Standard & Poor's, NPLs in 2009 were 3.2% of Al Rajhi's total loans. Qatar National Bank launched new payments systems and credit card products, whilst QNB Capital (investment banking arm) assisted in Qatar's record-breaking $7 billion sovereign bond in late 2009. It also expanded fund management activity in Switzerland. NPLs were reported at a paltry 0.7%.
National Bank of Abu Dhabi (NBAD)--the emirate's largest by assets--opened 12 new branches in the UAE, as well as in Jordan and Hong Kong. It introduced a new SMS remittance service and launched the region's first Exchange Traded Funds. The latter are 'open-ended' funds listed and traded on global exchanges. NBAD was the first UAE entity to tap international capital markets since Dubai World's problems, with a $750 millon five-year bond in March 2010. Last year, assets and customer deposits grew 20% and 17% respectively. The bank also boasts the lowest NPL ratio of all the Abu Dhabi's lenders, at 1.3% (covered by 166% provisions). Exposures to total DW lending and investment is $345 million, while the two defaulted Saudi groups owed just $10.9 million, according to NBAD's loan books.
Arab Bank (Jordan) is truly a global player with operations spread across five continents. It remains active in project and trade financing and facilitates investment flows between the Middle East and other regions. According to a Bloomberg report, Arab Bank holds the third-biggest exposure to Al Saad group after BNP Paribas (France) and US's Citigroup. The bank, however, increased its capital base and liquidity ratio to 49% of total assets in order to withstand external shocks. National Bank of Kuwait and Bahraini-based Ahli United Bank continue to rank among the best banks in their respective markets. Both have successful region-wide operations, including in Iraq and Libya.
Commercial International Bank (CIB), though small by standards of Gulf lenders, is the most profitable/ innovative of Egyptian banks. It launched a new auto-loan product and formed a new division for medium-sized companies. In areas of risk management, the bank has created units for interest rate and forex risk, as well as for liquidity management. CIB's potentials appeal to foreign investors--the private equity firm Actis is now the single-largest investor by acquiring 9.3% of the bank's shares for $244 million.
The top-tier Arab banks will most likely post higher assets and earnings growth in the near term as regional economies bounce back--the IMF expects growth in the MENA to be 4.5% in 2010 and 5% in 2011, in line with global recovery. Non-oil growth remains brisk, supported by fiscal stimulus in Saudi Arabia, the UAE and more recently, in Kuwait. With oil prices averaging $70-75 a barrel, liquidity is still available to support new business and private-sector projects.
Banks clearly possess the financial and human resources to play a bigger role in the region's economic prosperity over the next decade.
17 UAE banks in Top 100
11 Saudi Arabia banks in Top 100
11 Bahrain banks in the Top 100
10 Iranian banks in the Top 100
5% IMF projected growth rate for MENA in 2011
$7bn Qatar's sovereign bonds in 2009
Glossary of key financial concepts
Balance sheet mismatch A balance sheet is a fiscal statement showing a company's assets, liabilities and capital on a specified date. A mismatch in a balance sheet indicates that the maturities of the liabilities differ (are typically shorter) from those of the assets and/or that some liabilities are denominated in a foreign currency whilst the assets are not
Banking soundness The financial health of a single bank--measured by annual returns on total assets and equity--or of a country's banking system.
ROE the return on equity, which equals (total amount less preferred dividends) divided by total common equity multiplied by 100
ROA the return on assets, which equals (net income before preferred dividends) plus (interest expense on debt minus interest capitalised) multiplied by (1 minus the tax rate) divided by previous year's total assets multiplied by 100.
Asset liability management refers to prudent management of assets to ensure that liabilities are sufficiently covered by productive assets at all time,
Assets under management (AUM) funds managed by an investment company on behalf of investors.
Intermediation the process of transferring funds from the ultimate source (savers) to the ultimate user (borrowers), A bank intermediates credit when it obtains money from depositors and on lends it to borrowers.
Collateral security pledged for the repayment of a loan
Liquidity provides the ability to convert an asset into cash quickly.
Basel II Accord provides a comprehensive revision of the Basel capital adequacy standards issued by the Basel Committee on Banking Supervision. The new Framework is based on three pillars. Pillar 1 covers the minimum capital adequacy benchmarks for banks; Pillar 2 focuses on enhancing the supervisory review process: and Pillar 3 encourages market discipline through increased disclosure of banks' underlying financial conditions. The three pillars seek to improve the soundness and stability of the global banking system.
Total capital common equity, preferred stock, minority interests, long-term debt. non-equity reserves and deferred tax liability in untaxed reserves
Common equity refers to shareholders' total funds minus preferred equity.
Tangible common equity is total balance sheet equity less preferred debt and less intangible assets.
Risk capital money allocated for speculative investment activities.
Tangible assets are total assets minus intangible assets such as deferred tax assets and goodwill.
Total debt constitutes all interest-bearing and capitalised lease obligations
Total loans money loaned to customers before reserves for loan losses but after unearned income. It also includes lease financing and finance receivables Short-term debt represents that portion of debt payable within one year.
Deposits include the customers' deposits and certificate of deposits (CDs). There are two types of savings account--non interest-bearing current and time deposit accounts. The latter is referred to as a deposit account that pays a fixed term interest Time deposit represents a negotiated order of withdrawal
Time draft is a demand for payment on a specified future date--comprising banker's acceptance, bill and sight draft
Time bill represents a banker's acceptance or bill of exchange that is not payable until some specific future time. This contrasts with a banker's draft or sight bill, which is good for immediate payment at sight.
Foreign bank claim on domestic counterparts including deposits and balances, loans to non-banks and holdings of domestic debt securities.
Profit margin the difference between the price received by a company for its products/services and total production cost (including labour).
Net interest margin interest income earned on assets [less] interest expense paid on liabilities and capital. This is the gross margin for financial institutions.
EBITDA represents earnings before interest, taxes, depreciation and amortisation. It measures the underlying performance of a company.
Yield curve is the relationship between the interest rates (or yields) and time to maturity for debt securities of equivalent credit risk.
LIBOR refers to the London Interbank Offered Rate at which banks offer to lend unsecured funds to other banks in the London whole money market.
Leverage is the proportion of debt to capital often measured as the ratio of on- and off-balance sheet exposures to capital. Leverage can be built up by borrowing (on-balance sheet leverage, usually measured by debt-to-equity ratios) or by using off-balance sheet transactions.
Leveraged loans are 'sub-prime' loans rated below investment grade (BB+ and lower by Standard & Poor's and Ba1 and lower by Moody's Investors Services) to firms with a higher debt-to-EBITDA ratio, or trade at wide spreads over London Interbank Offered Rate (e.g. above 150 basis points).
Investment-grade obligation where bank loans or bonds are considered safe if they receive favourable debt ratings Standard & Poor's classifies investment-grade obligations as BBB- or higher, whilst Moody's Investors Services classifies investment-grade bonds as Baa3 or higher
Leveraged buyout (LBO) refers to acquisition of a company heavily funded by loans or bond issues to meet the cost of takeover. Usually, the assets of acquired company are used as collateral for bank loans.
Double gearing describes situations where two institutions use shared capital to protect against risk occurring in separate entities. For example, an insurance company may acquire a sizeable equity in a bank as a reciprocal arrangement for loans. Both institutions are leveraging their exposure to risk.
Syndicated loans consortiums of banks make large loans jointly to one borrower (sovereign or corporate). Usually. one lead bank takes a small percent of the loan and partitions (i.e. syndicates) the rest to other banks.
Non-performing loans (NPLs) are bad debts that are in default or close to being in default (i.e. typically in interest arrears for 90 days or more). Banks are required to cover these credit losses, commonly referred to as 'Expected Losses' (EL) on an ongoing basis by provisions and write-offs.
Provision for bad debts refers to losses a bank expects to absorb because of uncollectable or troubled loans (ie. NPLs) It includes transfer to bad reserves and amortisation of loans.
Value-at-risk (VaR) estimates the loss. over a given horizon, which is statistically unlikely to be exceeded at a given probability level.
Probability of default (PD) gives the average percentage of obligors in a particular rating grade that default in the course of one year.
Exposure-at-default (EAD) provides a general estimate of the amount outstanding in case the borrower defaults on repayments.
Loss-given default (LGD) gives the percentage of exposure the bank could lose in case the borrower defaults, These losses are shown as a percentage of EAD. and depend on the type and amount of collateral, as well as credit rating of the borrower and the expected proceeds from the sale of the assets.
Business cycle risk the lender may be vulnerable to exogenous shocks--slowdown or recession in local or regional markets.
Liquidity risk covers both the risk of being unable to fund a bank's portfolio of assets at appropriate maturities and the risk of being unable to liquidate a position in a timely manner at reasonable prices.
Earnings risk the possibility of current income being lower than expected.
Concentration risk is caused by heavy exposures to a limited number of clientele, industrial sectors or geographic areas.
Strategic risk unforeseen changes in fundamental market conditions.
Credit risk is the potential for losses on fixed-income assets and derivative contracts, caused by issue and counterparty defaults, and market value losses related to credit quality deterioration. Internationally active banks are heavily exposed to derivatives whose value derives from underlying securities prices, interest rates, foreign-exchange rates, market indices or commodity prices.
Counterparty risk the probability of an institution on the other side of a trade either defaulting or going bankrupt.
Credit tiering refers to differentiation of borrowers by their credit quality, thus resulting in higher cost and/or reduced flows to low-creditworthy clients.
Asset-backed security (ABS) is collateralised by loans, leases, receivables, or instalment contracts on commercial properties.
Collateralised loan obligation (CLO) is a debt obligation supported by whole commercial loans, revolving credit facilities or letters of credit.
Securitisation involves creating securities from a pool of pre-existing assets and receivables, which are placed under the legal control of investors through a "special purpose vehicle" (SPV) or "special purpose entity" (SPE),
Real time gross settlement (RTGS) is a globally accepted system to minimise interbank settlement risk by requiring that settlement occurs simultaneously with delivery of payments (i.e. in real time) for the full value of each payment (i.e. gross). Under this system, delivery occurs only if there is a transfer of settlement balances between accounts at the central bank.
SWIFT stands for Society For Worldwide Interbank Financial Telecommunications--a messaging system that facilitates global funds transfers.
MICR refers to Magnetic Ink Charter Recognition--a secure, high speed method of scanning and processing information used by banks.
TABLE 1 Number of banks per country BANKS BANKS COUNTRY 2010 2009 UAE 17 17 Saudi Arabia 11 11 Bahrain 10 10 Iran 13 14 Egypt 8 8 Kuwait 9 8 Qatar 7 8 Lebanon 8 8 Morocco 5 5 Jordan 3 2 Oman 3 3 Algeria 2 3 Tunisia 1 1 Libya 2 1 Syria 1 1 TOP 100 BANKS RANK BANK DATE OF COUNTRY CAPITAL RESULTS ($M) 1 The National Commercial 31/12/09 Saudi Arabia 7,637 Bank (NCB) 2 Emirates NBD 31/12/09 UAE 7,257 3 Riyadh Bank 31/12/09 Saudi Arabia 6,721 4 First Gulf Bank 31/12/09 UAE 6,063 5 Samba Financial Group, 31/12/09 Saudi Arabia 5,992 6 National Bank of Kuwait 31/12/09 Kuwait 5,952 7 Al Rajhi Bank 31/12/09 Saudi Arabia 5,859 8 National Bank of Abu Dhabi 31/12/09 UAE 5,795 9 Kuwait Finance House 31/12/09 Kuwait 4,784 10 Arab Bank 31/12/09 Jordan 4,771 11 Abu Dhabi Commercial Bank 31/12/09 UAE 4,656 12 Banque Saudi Fransi 31/12/09 Saudi Arabia 4,118 13 Qatar National Bank 31/12/09 Qatar 3,807 14 Arab National Bank 31/12/09 Saudi Arabia 3,637 15 Attijariwafa Bank 31/12/09 Morocco 3,153 16 Mashreqbank 31/12/09 UAE 3,149 17 Bank Saderat Iran 31/3/09 Iran 2,873 18 Union National Bank 31/12/09 UAE 2,831 19 Saudi British Bank (SABB) 31/12/09 Saudi Arabia 2,780 20 Awal Bank 31/12/08 Bahrain 2,702 21 Arab Banking Corp (ABC) 31/12/09 Bahrain 2,664 22 Bank of Industry and Mine 31/3/09 Iran 2,512 23 Dubai Islamic Bank 31/12/09 UAE 2,423 24 Commercial Bank of Qatar 31/12/09 Qatar 2,280 25 Groupe Bawiues Polulaires 31/12/09 Morocco 2,140 26 Banque Exterieur d'Algerie 31/12/09 Algeria 2,046 27 Commercial Bank of Syria 31/12/08 Syria 2,010 28 Export Development Bank 31/12/09 Iran 1,952 of Iran 29 Ahli United Bank 31/12/09 Bahrain 1,912 30 Bank Audi Sal 31/12/09 Lebanon 1,889 31 Saudi Investment Bank 31/12/09 Saudi Arabia 1,872 32 Gulf International Bank 31/12/09 Bahrain 1,833 33 Qatar Islamic Bank 31/12/09 Qatar 1,824 34 Bank Melli Iran 31/3/09 Iran 1,682 35 AlBaraka Banking Group BSC 31/12/09 Bahrain 1,662 36 BankMuscat (SAOG) 31/12/09 Oman 1,621 37 Libyan Arab Foreign Bank 31/12/08 Libya 1,501 38 Saudi Hollandi Bank 31/12/09 Saudi Arabia 1,496 39 BLOM Bank 31/12/09 Lebanon 1,487 40 National Bank of Egypt 3o/6/o9 Egypt 1,469 41 Commercial Bank of Kuwait 31112/09 Kuwait 1,423 42 Commercial Bank of Dubai 31/12/09 UAE 1,362 43 Bank Mellat 31/3/10 Iran 1,280 44 Bank Pasagard 31/3/10 Iran 1,265 45 Gulf Bank 31/12/09 Kuwait 1,239 46 Investcorp Bank BSC 30/6/08 Bahrain 1,237 47 Bank AlJazira 31/12/08 Saudi Arabia 1,236 48 Bank Sepah 31/3/09 Iran 1,196 49 Doha Bank 31/12/09 Qatar 1,162 50 The Housing Bank for 28/2/09 Jordan 1,130 Trade and Finance 51 Sharjah Islamic Bank 31/12/09 UAE 1,102 52 Burgan Bank 31/12/09 Kuwait 1,102 53 Parsian Bank 31/3/09 Iran 1,076 54 Banque de l'Agriculture 31/12/09 Algeria 1,035 et du Developpement Rural 55 Al Ahli Bank of Kuwait 31/12/09 Kuwait 1,024 56 Byblos Bank 31/12/09 Lebanon 1,016 57 Bank of Sharjah PJSC 31/12/09 UAE 1,012 58 Banque Misr SAE 3o/6/o8 Egypt 997 59 Credit Populaire d'Algerie 31/1z/o8 Algeria 980 60 Bank Tejarat 31/12/09 Iran 953 61 Banque Marocaine du 31/12/09 Morocco 937 Commerce Exterieur 62 Commercial International 31/12/09 Egypt 918 Bank (Egypt) 63 Societe Generale Marocaine 31/12/09 Morocco 890 de Banques 64 Banque Marocaine pour le 31/12/09 Morocco 873 Commerce et l'Industrie 65 Bank AlBilad 31/12/09 Saudi Arabia 867 66 National Bank of Umm Al 31/12/09 UAE 820 Qaiwain 67 Arab Bank for Investment 31/12/09 UAE 809 and Foreign Trade 68 Bank of Kuwait and the 31/12/08 Kuwait 730 Middle East 69 Boubyan Bank 31/12/10 Kuwait 718 70 Fransabank 31/12/09 Lebanon 718 71 Bank Maskan 31/12/09 Iran 712 72 BankMed 31/12/09 Lebanon 686 73 Qatar International 31/12/09 Qatar 670 Islamic Bank 74 International Bank of 31/12/09 Qatar 623 Qatar 75 National Societe Generale 31/12/09 Egypt 615 Bank SAE 76 National Bank of Oman 31/12/09 Oman 605 77 Bank of Bahrain and Kuwait 31/12/09 Bahrain 599 78 National Bank of Bahrain 31/12/09 Bahrain 576 79 Banque Libano-Francaise 31/12/09 Lebanon 576 80 Arab African International 31/12/09 Egypt 575 Bank 81 Rakbank 31/12/09 UAE 564 82 Bank Keshavarzi 31/3/09 Iran 540 83 Bank of Beirut 31/12/09 Lebanon 512 84 Banque du Caire SAE 31/06/2009 Egypt 496 85 BankDhofar 31/12/09 Oman 487 86 Kuwait International Bank 31/12/08 Kuwait 479 87 Dubai Bank 31/12/09 UAE 479 88 EN Bank (Bank Eghtesad 31/3/09 Iran 468 Novin) 89 InvestBank 31/12/09 UAE 458 90 HSBC Bank Egypt 31/12/09 Egypt 458 91 National Bank of Fujairah 31/12/09 UAE 433 92 Qatar First Investment 31/12/09 Qatar 431 Bank 93 Bank of Alexandria 31/12/09 Egypt 425 94 Karafarin Bank 31/3/10 Iran 425 95 United Gulf Bank 31/12/09 Bahrain 413 96 United Arab Bank 31/1/09 UAE 386 97 Gumhouria Bank 31/12/08 Libya 376 98 Banque Internationale 31/12/09 Tunisia 372 Arabe de Tunisie 99 Credit Libanais 31/12/09 Lebanon 368 100 Jordan Kuwait Bank 31/12/09 Jordan 355 RANK BANK ASSETS CAR PROFITS ROE ($M) (%) ($M) (%) 1 The National Commercial 68,654 11.1 1,077 14.1 Bank (NCB) 2 Emirates NBD 76,661 9.4 980 13.5 3 Riyadh Bank 47,040 14.3 808 12.0 4 First Gulf Bank 34,161 17.7 901 14.8 5 Samba Financial Group, 49,472 12.1 1,214 20.2 6 National Bank of Kuwait 44,974 13.2 986 16.1 7 Al Rajhi Bank 45,528 12.8 1,805 30.8 8 National Bank of Abu Dhabi 53,319 10.8 862 14.8 9 Kuwait Finance House 39,340 12.1 268 5.6 10 Arab Bank 5o,6o1 9.4 783 16.4 11 Abu Dhabi Commercial Bank 43,618 10.6 -139 -2.9 12 Banque Saudi Fransi 32,153 12.8 658 16.0 13 Qatar National Bank 49,258 7.7 1,152 30.2 14 Arab National Bank 29,413 12.3 632 17.4 15 Attijariwafa Bank 36,940 8.5 874 27.7 16 Mashreqbank 25,762 12.2 293 93.0 17 Bank Saderat Iran 41,131 6.9 313 10.9 18 Union National Bank 20,433 13-8 325 11.5 19 Saudi British Bank (SABB) 33,823 8.2 542 195.0 20 Awal Bank 7,645 35.3 -20 -0.7 21 Arab Banking Corp (ABC) 25,965 10.2 168 6.3 22 Bank of Industry and Mine 5,399 46.5 95 3.8 23 Dubai Islamic Bank 22,952 10.5 332 13.7 24 Commercial Bank of Qatar 15,747 14.4 470 20.6 25 Groupe Bawiues Polulaires 26,463 8.1 545 25.4 26 Banque Exterieur d'Algerie 30,023 6.8 466 22.8 27 Commercial Bank of Syria 17,575 11.4 470 23-4 28 Export Development Bank 3,837 50.8 51 2.6 of Iran 29 Ahli United Bank 23,574 8.1 230 12.0 30 Bank Audi Sal 26,486 7.1 357 18.9 31 Saudi Investment Bank 13,373 14.0 144 7.7 32 Gulf International Bank 16,208 11.3 -199 -10.8 33 Qatar Islamic Bank 10,789 16.9 493 27.0 34 Bank Melli Iran 54,347 3.1 266 15.8 35 AlBaraka Banking Group BSC 13,166 12.6 221 13.3 36 BankMuscat (SAOG) 15,032 10.8 229 14.1 37 Libyan Arab Foreign Bank 16,560 9.1 169 11.2 38 Saudi Hollandi Bank 15,763 95.0 23 1.5 39 BLOM Bank 20,702 7.2 343 23.0 40 National Bank of Egypt 46,380 3.1 419 28.5 41 Commercial Bank of Kuwait 12,527 11.3 104 73.0 42 Commercial Bank of Dubai 9,802 13.9 219 16.1 43 Bank Mellat 43,109 2.9 N/A N/A 44 Bank Pasagard 12,250 10.3 354 28.0 45 Gulf Bank 16,529 7.5 -98 7.9 46 Investcorp Bank BSC 4,766 25.9 151 12.2 47 Bank AIJazira 7,339 16.4 59 4.7 48 Bank Sepah 22,502 5.3 -88 -7.3 49 Doha Bank 12,635 9.2 268 23.0 50 The Housing Bank for 8,577 13.2 137 12.1 Trade and Finance 51 Sharjah Islamic Bank 4,349 253.0 154 13.9 52 Burgan Bank 14,264 7.7 111 10.1 53 Parsian Bank 19,783 5.4 405 37.6 54 Banque de l'Agriculture 11,234 9.2 62 6.o et du Developpement Rural 55 Al Ahli Bank of Kuwait 10,334 9.9 167 16.3 56 Byblos Bank 13,576 7.4 176 17.3 57 Bank of Sharjah PJSC 4,918 20.5 132 13.0 58 Banque Misr SAE 28,899 3.4 53 5.5 59 Credit Populaire d'Algerie 9,925 9.9 139 14.2 60 Bank Tejarat 34,081 2.8 -753 -79.0 61 Banque Marocaine du 21,426 4.3 139 14.8 Commerce Exterieur 62 Commercial International 11,616 7.9 371 40.4 Bank (Egypt) 63 Societe Generale Marocaine 8,926 10.0 100 11.2 de Banques 64 Banque Marocaine pour le 7,301 11.9 102 11.7 Commerce et l'Industrie 65 Bank AlBilad 4,643 18.6 -66 -7.6 66 National Bank of Umm Al 3,617 22.6 93 11.3 Qaiwain 67 Arab Bank for Investment 3,098 26.1 113 13.9 and Foreign Trade 68 Bank of Kuwait and the 8,105 9.0 202 26.7 Middle East 69 Boubyan Bank 3,913 18.3 N/A N/A 70 Fransabank 10,737 6.7 123 17.1 71 Bank Maskan 19,311 3.7 284 39.9 72 BankMed 10,537 6.5 109 15.9 73 Qatar International 3.528 19.0 138 20.6 Islamic Bank 74 International Bank of 6,301 9.9 94 15.1 Qatar 75 National Societe Generale 8,393 73.0 236 38.4 Bank SAE 76 National Bank of Oman 4,670 12.9 65 10.7 77 Bank of Bahrain and Kuwait 6,061 9.8 94 15.7 78 National Bank of Bahrain 5,632 10.2 114 19.8 79 Banque Libano-Francaise 7,475 7.7 76 13.2 80 Arab African International 8,285 6.9 166 28.8 Bank 81 Rakbank 4660 12.1 198 35.1 82 Bank Keshavarzi 18.444 2.9 13 2.4 83 Bank of Beirut 6,966 7.3 91 17.7 84 Banque du Caire SAE 7,095 7.0 73 14.7 85 BankDhofar 3,862 12.6 75 15.4 86 Kuwait International Bank 3,923 12.2 72 15.0 87 Dubai Bank 4,736 10.1 79 16.5 88 EN Bank (Bank Eghtesad 10,247 4.5 212 453.0 Novin) 89 InvestBank 2,555 17.9 89 19.4 90 HSBC Bank E ayja 6,529 7.0 249 543.0 91 National Bank of Fujairah 3,237 13.4 28 6.4 92 Qatar First Investment 588 733.0 N/A N/A Bank 93 Bank ofAlexandria 5,822 7.3 111 26.1 94 Karafarin Bank 3,765 113.0 152 35.7 95 United Gulf Bank 2,371 17.4 24 5.8 96 United Arab Bank 1,904 20.3 77 20.0 97 Gumhouria Bank 15,495 2.4 73 19.4 98 Banque Internationale 4,719 7.9 33 8.8 Arabe de Tunisie 99 Credit Libanais 5,482 6.7 62 16.8 100 Jordan Kuwait Bank 3,013 11.8 85 23.9 RANK BANK RDA (%) 1 The National Commercial 1.5 Bank (NCB) 2 Emirates NBD 1.3 3 Riyadh Bank 1.7 4 First Gulf Bank 2.6 5 Samba Financial Group, 2.4 6 National Bank of Kuwait 2.2 7 Al Rajhi Bank 3.9 8 National Bank of Abu Dhabi 1.6 9 Kuwait Finance House 0.6 10 Arab Bank 1.5 11 Abu Dhabi Commercial Bank -3.0 12 Banque Saudi Fransi 2.0 13 Qatar National Bank 2.3 14 Arab National Bank 2.1 15 Attijariwafa Bank 23.0 16 Mashreqbank 1.1 17 Bank Saderat Iran 0.7 18 Union National Bank 1.6 19 Saudi British Bank (SABB) 1.6 20 Awal Bank -0.2 21 Arab Banking Corp (ABC) 0.6 22 Bank of Industry and Mine 1.7 23 Dubai Islamic Bank 1.4 24 Commercial Bank of Qatar 2.9 25 Groupe Bawiues Polulaires 2.0 26 Banque Exterieur d'Algerie 1.6 27 Commercial Bank of Syria 2.7 28 Export Development Bank 1.3 of Iran 29 Ahli United Bank 0.9 30 Bank Audi Sal 1.3 31 Saudi Investment Bank 1.1 32 Gulf International Bank -1.2 33 Qatar Islamic Bank 4.5 34 Bank Melli Iran 0.5 35 AlBaraka Banking Group BSC 1.6 36 BankMuscat (SAOG) 1.5 37 Libyan Arab Foreign Bank 1.0 38 Saudi Hollandi Bank 0.1 39 BLOM Bank 1.6 40 National Bank of Egypt 0.9 41 Commercial Bank of Kuwait 0.8 42 Commercial Bank of Dubai 2.2 43 Bank Mellat N/A 44 Bank Pasagard 2.9 45 Gulf Bank -0.6 46 Investcorp Bank BSC 3.1 47 Bank AIJazira 0.8 48 Bank Sepah -0.4 49 Doha Bank 2.1 50 The Housing Bank for 1.6 Trade and Finance 51 Sharjah Islamic Bank 3.5 52 Burgan Bank 0.7 53 Parsian Bank 2.0 54 Banque de l'Agriculture 0.6 et du Developpement Rural 55 Al Ahli Bank of Kuwait 1.6 56 Byblos Bank 1.3 57 Bank of Sharjah PJSC 2.7 58 Banque Misr SAE 0.2 59 Credit Populaire d'Algerie 1.4 60 Bank Tejarat -2.2 61 Banque Marocaine du 0.6 Commerce Exterieur 62 Commercial International 3.2 Bank (Egypt) 63 Societe Generale Marocaine 1.1 de Banques 64 Banque Marocaine pour le 1.4 Commerce et l'Industrie 65 Bank AlBilad -1.4 66 National Bank of Umm Al 2.5 Qaiwain 67 Arab Bank for Investment 3.6 and Foreign Trade 68 Bank of Kuwait and the 2.5 Middle East 69 Boubyan Bank N/A 70 Fransabank 1.1 71 Bank Maskan 1.4 72 BankMed 1.0 73 Qatar International 3.9 Islamic Bank 74 International Bank of 1.5 Qatar 75 National Societe Generale 2.8 Bank SAE 76 National Bank of Oman 1.4 77 Bank of Bahrain and Kuwait 1.5 78 National Bank of Bahrain 2.0 79 Banque Libano-Francaise 1.0 80 Arab African International 2.0 Bank 81 Rakbank 4.2 82 Bank Keshavarzi 0.1 83 Bank of Beirut 1.3 84 Banque du Caire SAE 1.0 85 BankDhofar 1.9 86 Kuwait International Bank 1.8 87 Dubai Bank 1.6 88 EN Bank (Bank Eghtesad 2.0 Novin) 89 InvestBank 3.4 90 HSBC Bank E ayja 3.8 91 National Bank of Fujairah 0.8 92 Qatar First Investment N/A Bank 93 Bank ofAlexandria 1.9 94 Karafarin Bank 4.0 95 United Gulf Bank 1.0 96 United Arab Bank 4.0 97 Gumhouria Bank 0.5 98 Banque Internationale 0.7 Arabe de Tunisie 99 Credit Libanais 1.1 100 Jordan Kuwait Bank 2.8 CAPITAL = Shareholders' equity or core capital. PROFITS = Pre- tax earnings in US$ millions for end financial reporting year. CAR = Capital assets ratio--a measure of underlying financial strength. The health of a single bank is measured by annual returns on equity and total assets: ROE = Return on equity (core capital); ROA = Return on total assets deployed. ASSETS = Cash and short-term funds, demand balances with other banks, loans- advances (business and personal lending), structured project finance, short-term investments (Treasury bills), equity holdings (including stakes in non-banking ventures), debt stock and fixed assets. Prime 100 Middle Eastern and North African banks were ranked according to Tier 1 capital that comprises [a] common shareholders' equity and retained profits or net earnings; [b] qualifying non-cumulative preferred stock (up to a maximum 25% of core capital); [c] minority interests in equity accounts of consolidated subsidiaries. The BASEL Capital Convergence Accord as operated by most domestic regulators in the region requires banks to hold Tier 1 capital equivalent to at least 8% of their risk-adjusted assets, with half of this cushion in the form of core capital and the other half comprising 'Tier 2' capital. The latter comprises [a] undisclosed and revaluation reserves; [b] general provisions or general loan loss reserves: [c] perpetual preferred stock not qualified to be included into Tier 1; [d] hybrid debt instruments and subordinated debt items; [e] preferred stock with medium-term remaining current maturity.