A Gulf Business Report Shows Kingdom of Saudi Arabia Leads Banking Sector Profit Growth for the Middle East

DUBAI, August 26, 2012 /PRNewswire/ --

The Middle East banking sector shows strong growth off the back of mega-government spending sprees and policies that support internal growth. In a review of the profit posted by the top 50 regional banks ranked by assets, for the period H1 2011 verses H1 2012, Gulf Business has identified the top ten performing banks by percentage growth in the Middle East.

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This report shows that the banking sector in the region is in a better position than many of their international counterparts, being shielded by high capitalisation and favourable government policies, the outlook looks good for the remainder of 2012, with Alicia Buller, Editor of Gulf Business predicting moderate end of year growth over 2011 results as the regions recovery continues.

Sheetal Kothari, research analyst, business and financial services practice, Frost & Sullivan, told Gulf Business "The banks in the Kingdom have a good track record of maintaining strong asset quality and adapting adequate lending practices and underwriting standards".

Buller further elaborated on the reports findings, "Saudi Arabia's traditionally conservative fiscal polices coupled with the billion-dollar government budget, has buoyed the banking sector with four out of the five top ten banks being based in the Kingdom.  The largest bank by assets in the region as outlined by a 2011 banking report from Gulf Business, Qatar National Bank, rounded out our top ten on percentage terms, but with profits over $1 billion for the first six months, it could be on track to beat its bumper 2011 year-end profits of $2.07 billion."

"Most of the top ten profit growers came in from a lower base than their weightier counterparts, however the mammoth profit jumps are evidence of a grassroots regional recovery as banks in Saudi Arabia, Oman and Qatar feel the buoying effects of government support that Western banks are sorely missing" Buller concludes.

Gulf Business Report Summary:  Top Ten Banks In The GCC By H1 Profit Growth

1. Bank Albilad: 385%

Saudi Arabia's second-smallest bank by market value tops the list with 385 per cent growth, reported half-year profits of $177.3 million, up from $36.5 million last year.

[The Riyadh-based banks's shares rose in February when it signed a deal with the government to accelerate home lending.]

2. Bank Dhofar: 324%

Oman's third-largest bank by market capitalisation, Bank Dhofar reported a 324 per cent rise post net profit of $50.6 million in the six months ending June 30.

[Bank Dhofar made a loss of $11.9 million following an their unsuccessful court battle in H1 2011 with HSBC Bank Oman and Ali Redha Trading and Muttrah Holding].

3. Bank Al Jazira: 115%

Bank Al Jazira, Saudi Arabia's smallest lender by market value, posted a 115 per cent rise with a $72.5 million net profit to June 30 2012.

4. Alinma Bank: 91%

Saudi's Alinma Bank posted a 91 per cent rise, ending the first half of the year with $87.8 million in net profit.

5. Saudi Hollandi: 24.1%

Saudi Hollandi, the Kingdom's oldest bank, posted a 24.1 per cent profit increase. The bank ended the first six months of the year with $165.9 million in net profit, up from $133.6 million for the same period in 2011.

6. Burgan Bank: 23%

Kuwait-based, Burgan Bank reported a rise of 23 per cent for the first half of the year with net profit of $110.3 million.

7. Sharjah Islamic Bank: 21%

Sharjah Islamic Bank, from the United Arab Emirates, posted a 21 per cent rise in net profit at $40.6 million for the first half of the year, up from $33.5 million in 2011.

8. Bank Muscat: 19.6%

Oman-based Bank Muscat posted a net profit of $177.6 million for the first six months of the year, a 19.6 per cent rise from last year's $148.5 million.

9. Boubyan Bank: 18%

Boubyan Bank from Kuwait, reported $18.4 million in net profit for the first six months; an 18 per cent rise from the bank's 2011 figure.

10. Qatar National Bank: 17.1%

Qatar National Bank (QNB) revealed a net profit of $1.1 billion for the first six months, a 17.1% increase from last year's $961.3 million.

Regional banking investment experts will be keeping a close eye on Bank Albilad's profit results for the year ending 2012. With its' share price already reflecting the anticipated growth from the effects of the recent government deal, this small bank could be one of the first winners of the Kingdom's upcoming property windfall.

Source link: http://gulfbusiness.com/2012/08/top-ten-gcc-banks-in-2012/ 

Other references: http://gulfbusiness.com/2012/08/the-top-50-banks-in-the-gcc/

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