MIDDLE EAST

Saudi Arabia has by far the largest economy in the Middle East, with a gross domestic product (GDP) of $783bn.

The kingdom, however, no longer boasts the region’s largest banks – that honour now falls to Qatar and the United Arab Emirates, despite the fact that two countries’ economies combined are almost one-third smaller than Saudi Arabia’s. Qatar’s GDP is $195bn and the UAE’s is $414bn (making a total of $609bn).

The table of top Middle East banks by Tier 1 capital, 2000-2019, by rank, shows that Saudi Arabia’s largest bank National Commercial Bank held top position over a 10-year period between 2006 and 2016 before falling to third place.

The other Saudi banks also placed higher previously. Al Rajhi Bank, currently fifth, was in second and third positions during the same 10-year period and Samba Financial, now in sixth place, was as high as third on two occasions. Likewise, Riyad Bank, which placed fifth back in 2000, reached the second spot twice, between 2006 and 2016, but has since dropped to eighth.

"Saudi Arabia... however, no longer boasts the region’s largest banks – that honour now falls to Qatar and the United Arab Emirates"

The Middle East story over the past two decades has been the dramatic rise of Qatar National Bank (QNB) and the UAE’s First Abu Dhabi Bank, which was formed after the merger of First Gulf Bank and National Bank of Abu Dhabi in 2016. On its own, National Bank of Abu Dhabi ranged from 10th to fifth, and the union pushed the merged entity up to second place.

First Abu Dhabi Bank and Qatar National Bank are so close in terms of their Tier 1 capital – each with about $20bn – that they place next to each other in the 2019 Top 1000 World Banks ranking, and a relatively small shift in either banks’ performance could lead them to swap positions. QNB itself has expanded enormously over the 20-year period covered in the table and has made a number of overseas acquisitions.

In 2013, for example, it bought Société Générale’s Egyptian business for $2bn and in 2014 it took a 23.5% stake in Africa’s Ecobank International. In 2016, meanwhile, it bought Turkey’s Finansbank from National Bank of Greece for $2.95bn. This expansion has enabled it leap from the 10th place it occupied between 2006-2012 to first place today.

"First Abu Dhabi Bank and Qatar National Bank are so close in terms of their Tier 1 capital... that they place next to each other in the 2019 Top 1000"

Kuwait’s banks have always enjoyed a strong presence in the region and the country’s banking sector is the fifth largest, as shown in the table of the top Middle East countries by Tier 1 capital, 2000-2019. The largest Kuwaiti bank, National Bank of Kuwait, ranks 10th in the banks’ table.

The performance of the Israeli banks is worth noting. Twenty years ago, Bank Hapoalim was first and Bank Leumi second whereas in 2019 they place seventh and ninth respectively. The Israeli banking sector has grown over this period but not as fast as other countries in the region such as Qatar, the UAE or Saudi Arabia, which with $95bn of Tier 1 capital, has the region’s largest industry if not the largest bank.

"The performance of the Israeli banks is worth noting. Twenty years ago, Bank Hapoalim was first and Bank Leumi second whereas in 2019 they place seventh and ninth respectively"

Top 1000 World Banks:
The Middle East looks beyond oil

John Everington, The Banker's Middle East and Africa editor, talks to Chiro Ghosh, vice president for research at SICO, about the changing landscape of the Middle East's banking sector, how regulatory oversight has evolved, and the likely impact of the Covid-19 outbreak on the region's lenders.

2020 Results

Qatari giant QNB holds onto top spot.

Qatar National Bank (QNB) remains top of the pile in the Middle East in The Banker’s Top 1000 World Banks ranking for 2020. But a fresh wave of consolidation among banks in the region has prompted the arrival of two new lenders in the regional top 10, with similar deals set to continue to disrupt the regional landscape in the years to come.

The Qatari giant held on to the top spot in 2020, a year after regaining the position from the UAE’s First Abu Dhabi Bank (FAB). QNB’s Tier 1 capital rose an impressive 10.4% to $24.9bn in 2019, pushing it up to 72nd position in the overall rankings from 75th position in 2019’s ranking. FAB’s 6.5% rise in its capital position pushed it up one position to 85th position in the Top 1000 ranking but it was not enough to challenge QNB’s lead.

Emirates NBD was the best performer in the regional top five this year, leapfrogging Saudi Arabia’s National Commercial Bank (NCB) into third place with an impressive 34.1% growth in Tier 1 capital.

But it was another UAE-based lender, Abu Dhabi Commercial Bank (ADCB) that won the accolade of the fastest growing bank in the region for 2020 – and the 20th highest overall worldwide – thanks to its acquisition of local rivals Union National Bank and Al Hilal Bank. The merger, completed in May 2019, saw ADCB’s overall capital position improve by 53.6% to $13.6bn, moving the bank up to sixth position in the region, from 12th in 2019.

Saudi British Bank’s (SABB’s) merger with fellow Saudi lender Alawwal Bank in 2019 saw it enter the region’s top 10 in ninth position, its Tier 1 capital position improving 24.8% to $11.1bn. Further mergers currently underway in the sector – including Dubai Islamic Bank’s acquisition of local rival Noor Bank and Kuwait Finance House’s long-awaited takeover of Bahrain’s Ahli United Bank – are set to create more regional powerhouses in the years to come.

Top 1000 World Banks 2020 Middle East

While QNB remains the Middle East's largest bank, a fresh wave of consolidation is creating a new class of giants across the Gulf region. John Everington discusses the main Middle Eastern developments in the 2020 ranking.

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