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AfricaNovember 4 2004

Arab banks’ profits soar

Political troubles have had little impact on the region’s banking sector, judging by this year’s Top 100 ranking.
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The Arab banking world, particularly in the oil-rich Gulf states, is in the midst of a boom. Despite political uncertainties, profits have ballooned. The Banker’s Top 100 Arab banks, based on 2003 results, showed 6.5% growth in aggregate Tier 1 capital to $53.9bn, 6.7% growth in aggregate assets to $654bn and 16.4% growth in aggregate pre-tax profit to $8.8bn.

Gulf banks continued to produce strong results. Saudi Arabia’s 10 banks, which account for 27.1% of the total Tier 1 capital and 22.1% of the total assets of the Top 100, produced a 16.3% increase in pre-tax profits to $3.3bn on the heels of a 6.1% uplift in the previous year. The seven Kuwaiti banks achieved a 21.1% growth in pre-tax profits to $1.2bn. The region has an aggregate return on capital (Tier 1) of 16.3% and 1.3% aggregate return on assets.

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