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Top 1000 World BanksSeptember 1 2021

Saudi Arabia's SAIB punches above its weight for performance

Saudi Investment Bank showed the country’s larger lenders the way on asset quality and return on risk, to take the laurels for best performance. 
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Saudi Investment Bank (SAIB) — the country’s best-performing bank for 2021 — is proof that size isn’t everything. National Commercial Bank’s supermerger with Samba Financial Group and the completion of SABB’s absorption of Alawwal dominated the headlines of the past 18 months; yet it is SAIB — the country’s ninth largest lender by assets — that has emerged as Saudi’s best performer in the 2021 rankings, scoring top marks for asset quality and return on risk, while ranking in the top three for profitability, liquidity, soundness and leverage.

Notably, SAIB — which stayed at 314th position in The Banker’s main Top 1000 ranking — was the only one of the country’s top 10 lenders to register an improvement in its return on assets and return on equity, prompted by a 13% decline in deposits for the year. The bank signed a banking agency agreement in December with local mobile telecoms provider Virgin Mobile, enabling the latter to provide mobile remittances.

As well as consolidating its position as the country’s largest lender by Tier 1 capital — which increased 16.7% to $21.8bn — National Commercial Bank (NCB) comes in second place in Saudi Arabia’s performance rankings for 2021, up one place from last year. The bank rose five places in the main Top 1000 ranking to 89th place, just 10 places behind Qatar National Bank, the region’s largest lender.

NCB was also the best performer in terms of operational efficiency, with a cost-to-income ratio of just 26.17%, down from 26.44% the previous year. It also ranked second in the country for growth, with a 22.5% increase in its loan book in 2020.

After abandoning a merger with Riyad Bank — the country’s fourth largest lender and seventh best performer — in late 2019, NCB successfully completed a merger with Samba in April 2021. The newly created entity, subsequently rebranded as Saudi National Bank, has an asset base of around $240bn, making it the third largest lender by assets in the Middle East behind QNB and the UAE’s First Abu Dhabi Bank.

Al Rajhi Bank, which topped Saudi Arabia’s inaugural performance rankings in 2020, takes fourth position this year. While ranking first for both growth and profitability, the Islamic lender’s performance score was dragged lower by poor scores for liquidity and soundness, coming in ninth and 10th place respectively. Al Rajhi’s capital-to-assets ratio dropped by 93.15 basis points to 12.4% in 2020, the lowest figure for any of the country’s top 10. The bank gained two places in the overall Top 1000, sitting in 113th place and placing fifth overall in the region.

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John Everington is the Middle East and Africa editor. Prior to joining The Banker, John was the deputy business editor of The National in the UAE, and has also worked for Dealreporter, Arab News and The Telegraph. He has also covered the telecom sector in Africa and the Middle East, living and working in Qatar and the UK. John has a BA in Arabic and History and an MA in Middle Eastern Studies from the School of Oriental and African Studies (SOAS) in London.
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