Saudi lenders continue to advance thanks to economic improvements and government housing initiatives. John Everington reports.
Saudi National Bank’s (SNB’s) coronation as the Middle East’s largest bank in The Banker’s Top 1000 World Banks ranking for 2022 capped a stellar year for the country’s lenders. Some nine of the 10 Saudi lenders in this year’s Top 1000 achieved a higher position than in last year’s list, with Al Rajhi Bank likely to join SNB in the top 100 in next year’s ranking.
Banking assets in Saudi Arabia grew by 10% to SR3.3tn ($879.43bn) in 2021, the second-highest increase in the country’s history, on the back of a private sector economic recovery and a sharp rebound in oil revenues. Credit grew by 15.5% for the year, underpinned once again by the country’s booming mortgage market, feeding off government initiatives to boost home ownership among Saudi nationals.
SNB and Al Rajhi continue to be the major beneficiaries of the boom in mortgages. SNB’s asset base — boosted by the absorption of Samba Financial Group — grew by 52.5% to $243.8bn, making it the Middle East’s third-largest lender by assets behind Qatar National Bank and First Abu Dhabi Bank.
Al Rajhi’s growth for the year — unaided by acquisitions — is perhaps even more impressive, with the lender maintaining the country’s largest market share for mortgages, personal and auto loans. Al Rajhi — the world’s largest Islamic lender — reported a 33.0% increase in assets and a 20.8% rise in its Tier 1 capital base during 2021, helping it climb 10 spots in the overall rankings to 103rd position overall.
As was the case with 2021’s ranking, size does not necessarily equate to leading performance. Saudi British Bank the country’s fourth-largest lender by Tier 1 capital, is Saudi Arabia’s best-performing bank for 2022, just a year after coming last. The bank secured the top spot thanks to table-topping scores for profitability — in recognition of its return to profit during 2021 — and return on risk.
The country’s sixth-largest lender, Alinma Bank, comes second in this year’s performance rankings. Its strong showing is thanks in no small part to its strong scores for operational efficiency, leverage, and above all, soundness, with its capital adequacy ratio increasing from 16% to 18.1% during the year.
In addition to its strong performance, Alinma gained more places than any Saudi lender in this year’s overall Top 1000. The bank’s 25% increase in Tier 1 capital saw it rise 38 places to 195th in the overall rankings, leapfrogging Arab National Bank to become the country’s sixth-largest lender.
