Top 1000 World Banks – NCB heads pack as Saudi banks hold firm

Saudi Arabia’s banks have held their own in The Banker’s Top 1000 World Banks ranking, even as the country’s headline economic growth ground to a virtual standstill. And while 2020 is set to be one of the most challenging on record – thanks to local coronavirus restrictions, a collapse in oil prices and the slashing of interest rates by the central bank – the country’s largest banks are likely to retain their strong positions in the region.

National Commercial Bank (NCB), placing 94th in 2020’s Top 1000 ranking, maintains its status as the country’s largest lender, and the fourth largest lender in the Middle East behind Qatar’s QNB (at 72) and the UAE’s FAB and Emirates NBD (at 85 and 87, respectively).

NCB’s Tier 1 capital base grew by 5.3% to $18.7bn in 2019, with assets increasing by an impressive 11.9%. Pre-tax profits increased by 19.3% for the year, second only to fifth-placed Riyad Bank (whose profits grew 32.1% during the year) in percentage terms.

Saudi British Bank (SABB) was the main gainer in the 2020 rankings. The bank overtook Riyad Bank to take fourth spot, with its landmark acquisition of Alawwal Bank boosting its Tier 1 position by 24.8% and its asset base by 52.1%.

Samba Financial Group ranks fifth in terms of its overall asset base, but made third position in the main rankings, thanks to its Tier 1 capital base, which rose by almost 6.0% during the year to $12.5bn.

Of the country’s top 10 lenders in the main ranking, seventh-placed Arab National Bank is the only other other riser in the Top 1000 ranking, its 7.3% rise in Tier 1 capital helping it move up two places to 194th position.

In Saudi’s inaugural best-performance rankings, Al Rajhi Bank comes up trumps. Ranking second in terms of Tier 1 capital, the Islamic lender led the pack in terms of performance, coming first for profitability and return on risk, while also scoring highly for operational efficiency and asset quality.

Riyad Bank ranks second for performance, and comes in second place in five of the rankings’ eight criteria, including growth, profitability and asset quality.

NCB – which was in talks to merge with Riyad Bank until talks broke down in December 2019 – takes third position for performance. The bank’s good showing in metrics such as operational efficiency, profitability and return on risk was let down by its relatively poor performance in leverage, soundness and growth.