Middle East banks had the wind in their sails in 2022. Following on from the post-pandemic recoveries registered in 2021, the region’s major economies – whose currencies are mostly pegged to the dollar – benefited from windfalls from higher oil prices, with inflation in the main remaining at lower levels than among their global peers.
While slightly lower oil prices are likely to make future performance more muted, Middle Eastern lenders have improved their standing in The Banker’s Top 1000 World Banks ranking, with 22 of the region’s 25 largest banks climbing to a higher position.
The region is led for the second year in a row by Saudi National Bank, which has risen three places to 64th position overall, thanks to a 4.1% increase in its Tier 1 capital base. Qatar National Bank, the region’s second ranked lender (and largest by assets), recorded a 5.3% rise in Tier 1 capital in 2022, helping it rise four places to number 73 in the overall rankings.
Saudi Arabia’s second-largest lender Al Rajhi Bank is the region’s standout performer in this year’s rankings. Al Rajhi – the world’s largest sharia-compliant bank – registered the highest non-acquisition related increase of Tier 1 capital and assets of any lender with assets in excess of $100bn worldwide, helping it climb 25 places in the overall rankings.
While Saudi Arabia’s mortgage boom, which has delivered unprecedented growth to lenders over the past five years, has begun to slow, strong corporate and small and medium-sized lending saw Al Rajhi’s Tier 1 capital base increase by 43.8% in 2022, helping it overtake the UAE’s First Abu Dhabi Bank and Emirates NBD to become the region’s third-largest bank.
Al Rajhi is also a leader among the region’s largest lenders in terms of return on capital and return on assets.
Emirates NBD, which remains the region’s fourth-largest bank, is now the top-ranked UAE lender, thanks to an 11.9% rise in Tier 1 capital. First Abu Dhabi Bank, the country’s largest lender by assets, slips to fifth overall in the region in the 2023 ranking, after posting next to no growth in its Tier 1 capital position in 2022.
The Middle East has a new entrant this year, Oman’s Bank Nizwa. The country’s first Islamic bank enters the ranking in 979th place, despite a 1.39% drop in Tier 1.
