The GCC banking sector witnessed signs of a slow but steady recovery in 2011 following the fallout from the global financial crisis in 2008.
Higher returns for the GCC banking sector last year were attributable to to a combination of improving asset values, increased non-interest income, and a slight widening of margins. The latter reflected a marginal fall in funding costs as liquidity improved for both wholesale and retail sources, together with credit growth during the year. Regional non-performing loans decreased again in 2011 and very few banks saw an increase in non-performing loans during the year.
However, provisioning charges for loans rose again for a number of banks, particularly in the final quarter of 2011. Loan asset quality remains an important issue for GCC banks but on the whole the position remains comfortable. Asset values have now stabilised for listed and unlisted securities, as well as for real estate, and realistic values are now carried in balance sheets.
THE GCC’S TOP TEN BANKS BY ASSET VALUE
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.
3. Emirate NBD (ENBD)
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. Abu Dhabi Commercial Bank (ADCB)
ADCB’s assets rose 3.1 per cent per cent year-on-year in 2011 to reach $50 billion.
8. National Bank of Kuwait (NBK)
NBK, Kuwait’s biggest bank, assets rose six per cent to $48.9 billion in 2011.
9. Kuwait Finance House
Kuwait Finance House’s assets rose 7.71 per cent from 2010 to reach $48.3 billion last year.
10. 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.
In May’s print issue of Gulf Business, we stated that ADCB’s total assets reached $47.6 billion. This web article has been revised to include the correct assets figure, which rose 3.1 per cent to reach $50 billion. The discrepancy arose due to the non-addition of customer acceptions. Gulf Business would like to apologise for the error.