Singapore, Oct. 27 /PRNewswire-Asia/ --

    Banks in Asia Pacific and the Arab Middle East see strong growth, profit

    -- Strength of over 500 banks assessed with well-established scorecard
    -- Emerging market banks in Asia Pacific upstage larger banks in developed
       markets
    -- Arab Middle East banks are strong in loan and deposit growth, but flat
       or falling profit levels remain a concern

The Asian Banker has released an interactive, online report on the 500 largest banks by assets in the Asia Pacific region, along with a second ranking of the 92 largest banks by assets in the Arab Middle East. The database provides an objective comparison of bank performance in the two regions, key strength characteristics of the banks listed, as well as insights into how they might withstand the challenges of 2009. Rankings are based on most recent full-year financial results.

"With these two rankings, we are the first to provide banks with a view of their strengths within their own regions. And as commerce between the Asia Pacific and the Middle East grows, the information in this report can open the door for banks in one region to learn more about their counterparties in the other, and for them to do more business with each other," says Emmanuel Daniel, President and CEO of The Asian Banker.

The report is The Asian Banker's biggest-ever, and is a key resource for understanding the relative sizes and strengths of the financial institutions of the Asia Pacific and Arab Middle East regions. For each region there are two rankings: the first one is by asset size and contains key financial information, while the second one assesses strength according to a bank's score that is calculated from a series of key performance indicators.

The report can be accessed at http://www.theasianbanker500plus.com .

Strength of over 500 banks assessed with well-established scorecard

The Asian Banker has been ranking banks according to strength since 2002, when it developed a scorecard to assess the 300 largest and strongest banks in Asia Pacific. Since then, the company has been communicating with the financial services industry to refine its scorecard, which calculates business strength by weighing scale, balance sheet growth, risk profile, profitability and asset quality. As a response to the financial crisis, the company has this year added liquidity as one of the key indicators.

While banks may grow on their own or through acquisitions, size is rarely equivalent to strength; large banks can earn some points for their size, but they also need to score high in the other indicators as well to show up high on the strength chart. Often the relationship is inversely proportional-large banks tend to be relatively weak, while small banks are relatively strong. Among the ten strongest banks in Asia Pacific, only one is in the top ten for size. In the ten strongest banks in the Arab Middle East, three are among the ten largest.

Emerging market banks in Asia Pacific upstage larger banks in developed markets

Because asset, loan and deposit growth is a key indicator of long-term strength, banks in Asia Pacific's emerging markets outperformed developed market banks. Whereas there had been 10 banks in the top 20 from developed markets of Australia, Hong Kong, Singapore, South Korea and Taiwan in the previous ranking, this year only two banks from these markets made it onto the list. HSBC, OCBC and Hang Seng Bank, which last year were in the top three spots are this year at positions 39, 24 and 30 respectively.

The banks from developed markets have been replaced by banks from India, China, Malaysia and Indonesia, which have all seen high asset, loan, deposit and profit growth. And although the addition of liquidity to the scorecard could skew a year-on-year comparison, banks from developed markets that have fallen in the ranking have not been dragged down by this indicator, as they mostly have strong liquidity.

The banks that have done the poorest in the ranking are the Japanese lenders, which fill out the bottom of the strength ranking: 61 of the banks in the bottom 100 are from Japan. Besides profitability, they score poorly with other strength indicators such as cost to income ratio, non-interest income to total income, ROA and ROE. Taiwanese banks are also particularly weak, with 10 of the 37 banks in the survey sitting in the bottom 100 for strength ranking. Of the 85 banks in Asia Pacific to declare losses, 61 were Japanese and 15 from Taiwan. Ten banks in each market had also lost money two years in a row.

Arab Middle East banks are strong in loan and deposit growth, but flat or falling profit levels remain a concern

Overall, the banks of the Arab Middle East were profitable, with Samba Financial Group topping that ranking with $1.185 million earned in 2008. With 51 of the banks showing a gain in profit, only 12 took losses, which ranged from $3 million to $1.3 billion. In total, 29 banks had an ROA of over 2%. But in terms of sustainability, banks appear to be heavily reliant on lending, with only two banks earning more than 50% of their income in fees, and their income is not growing significantly when compared with past years.

Loan growth was strong, with some of the smaller banks showing growth in triple digits or high double digits. Even large banks took advantage of opportunities, with four of the ten largest banks showing over 40% loan growth. In terms of deposits, one bank had triple digit growth, with six of the top ten banks showing over 20% deposit growth. Only eight banks saw their deposits shrink, while seven saw the level of their loans drop.

Where the banks in the listing tended to be weak was in the risk index, which measures how much a bank's earnings can decline until book value becomes negative, as expressed in units of standard deviation of ROA. Here 11 banks, all in the bottom half of the strength ranking, earned one point or less out of a possible five. Even worse was the indicator of operating profit growth, where 30 banks scored one point or less out of a possible five.

About The Asian Banker

The Asian Banker is the foremost provider of strategic business intelligence in the financial services industry in the Asia Pacific and Middle East regions. The organization has offices in Singapore, Kuala Lumpur, Beijing and Dubai as well as representatives in Shanghai, London and New York. With a business that revolves around publications, research services, training and forums, the organization is highly regarded in the financial services community for its incisive and independent commentaries on developments in the industry. The company's website is http://www.theasianbanker.com .

    Appendices:


    Asia Pacific's Strongest Banks
       AP500                                                    Aggregate
     Strength         Commercial Bank           Country         Strength
     Rank 2009                                                  Score 2009
         1          HDFC Bank                    India             3.99
         2          Punjab National Bank         India             3.91
         3          Public Bank                  Malaysia          3.84
         4          Bank Central Asia            Indonesia         3.83
         4          Bank of Nanjing              China             3.83
         6          ANZ Panin Bank               Indonesia         3.78
         7          China CITIC Bank             China             3.76
         8          ANZ National Bank            New Zealand       3.70
         8          Union Bank of India          India             3.70
         10         Westpac Banking Corporation  Australia         3.68



    Asia Pacific's Largest Banks

     AP500                                                       Assets
     Rank             Commercial Bank           Country              Change
     2009                                                  $million  (Local
                                                                    Currency)

      1      Mitsubishi UFJ Financial Group     Japan    2,086,805     3.7%
      2      Mizuho Financial Group             Japan    1,639,485    -0.6%
      3      Industrial and Commercial Bank
              of China                          China    1,427,610    12.4%
      4      Sumitomo Mitsui Financial Group    Japan    1,275,578     7.8%
      5      China Construction Bank            China    1,105,471    14.5%
      6      Agricultural Bank of China         China    1,026,300    32.2%
      7      Bank of China                      China    1,017,130    16.0%
      8      Hongkong and Shanghai Banking
              Corporation                       Hong Kong  549,652     7.8%
      9      National Australia Bank            Australia  455,030    14.4%
     10      Resona Holdings                    Japan      430,916     0.1%



    The Arab Middle East's Strongest Banks 2009

     Strength    Commercial Bank               Country             Score
       Rank
        1    Commercial Bank of Qatar           Qatar               4.05
        2    Qatar National Bank                Qatar               4.04
        3    First Gulf Bank              United Arab Emirates      4.01
        4    Ahli Bank                          Qatar               3.79
        5    Bank Muscat                        Oman                3.76
        6    National Bank of Abu Dhabi   United Arab Emirates      3.73
        6    Saudi British Bank              Saudi Arabia           3.73
        8    Banque Saudi Fransi             Saudi Arabia           3.61
        9    International Bank of Qatar        Qatar               3.60
       10    Union National Bank          United Arab Emirates      3.59



    Arab Middle East's Largest Banks

       AME                                                     Assets
      Rank     Commercial Bank           Country                    Change
      2009                                              $million    (Local
                                                                   Currency)

        1    Emirates NBD         United Arab Emirates   76,900       11.3%
        2    National Commercial
              Bank                    Saudi Arabia       59,147        6.3%
        3    Samba Financial Group    Saudi Arabia       47,704       15.9%
        4    National Bank of Abu
      Dhabi               United Arab Emirates   44,834       18.1%
        5    National Bank of
              Kuwait                     Kuwait          43,389        3.8%
        6    Riyad Bank               Saudi Arabia       42,574       31.6%
        7    Qatar National Bank         Qatar           41,751       32.9%
        8    Abu Dhabi Commercial
              Bank                United Arab Emirates   40,226       39.1%
        9    Saudi British Bank       Saudi Arabia       35,110       34.1%
       10    Banque Saudi Fransi      Saudi Arabia       33,564       26.1%



    For more information on the strength rank scorecard, please contact:

     Ananya Dutta
     Tel:    +65-6236-6174
     Email:  dananya@theasianbanker.com

    To receive the brochure, please contact:

     Jerome Ong
     Tel:    +65-6236-6175
     Mobile: +65-9067-4980
     Email:  jong@theasianbanker.com

SOURCE The Asian Banker

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