Gulf banks still on top despite difficult year
In response to last year's regional crises concerning Dubai World and the defaults by two Saudi business conglomerates, a number of Middle Eastern banks are beginning to recapitalise. Irrespective of those difficulties, Gulf-based banks maintained their dominant position among Middle Eastern banks. Banks based in the Gulf Co-operation Council (GCC) states - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates - account for 58 of the 90 Middle Eastern banks featured in this year's Top 1000 rankings.
Notable performers include Emirates NBD, a bank known to be exposed to Dubai World's debt obligations, which improved its Tier 1 capital largely on the back of the issuance of Tier 1 perpetual securities worth more than $1bn to the Investment Corporation of Dubai in the second quarter of 2009.
National Bank of Abu Dhabi (NBAD), another bank exposed to Dubai World, significantly boosted its Tier 1 capital following a capital injection of more than $1bn worth of capital notes from the Abu Dhabi government in March 2009. Union National Bank, another UAE bank, posted a significant increase in Tier 1 capital following the issuance of capital notes to the government of Abu Dhabi worth about $550m despite reporting an increase in non-performing loans, partly due to exposure to the AHAB default. Conversely, Bahrain-based Gulf International Bank, a bank hit by exposure to the global financial crisis and Dubai World's debt, posted declines in its Tier 1 capital and assets.
A special mention should go to Bahrain's Al Salam Bank, which reported substantial increases in the value of its Tier 1 capital and assets. Al Salam's performance was due in large part to its acquisition of Bahraini Saudi Bank (BSB), a move that required the issuance of 225.8 million shares to BSB shareholders.
Elsewhere, Lebanon's banks, led by Bank Audi, Blom and Byblos, continue to perform well, with Fransabank and BankMed jumping more than 100 places in the overall rankings. Those banks have benefited from a highly liquid and well-regulated domestic market that has been resilient to the global financial crisis.
In global terms, the region accounts for 3.58% of total Tier 1 capital and 1.91% of total assets for the 1000 banks in this year's rankings. The performance of the region's banks this year will largely depend on how institutions emerge from the crises of last year.
Top 25: Middle East ($m)
Highest movers: Middle East ($m)
New entrants: Middle East ($m)
