Arab Banks' Assets Rise to $2.26 Trillion in 2009

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The total assets of the top 100 Arab banks in terms of assets has surpassed $1.5 trillion, deposits reached $1 trillion, total loans amounted $831 billion, shareholders equities reached $164 billion and net profits reached $24 billion, Yousef said while addressing the EmiratesEmirates Bankers' Forum.

On the global front, banking institutions from the Arab region bolstered their presence further with 89 banks making into the list of the largest 1000 global banks in terms of assets, Yousef pointed out.

EmiratesEmirates

Emirates NBDEmirates NBD was the number one Arab bank with assets size reaching $76.72 billion, followed by Al Ahli Commercial Bank ($68.65 billion), the National Bank of Abu DhabiNational Bank of Abu Dhabi ($53.64 billion), the Arab BankArab Bank ($50.6 billion), Samba Financial GroupSamba Financial Group ($49.6 billion), National Bank of QatarNational Bank of Qatar ($49.26 billion), Riyadh Bank ($47 billion), Al Rajhi BankAl Rajhi Bank ($45.6 billion), National Bank of KuwaitNational Bank of Kuwait ($44.97 billion), and Commercial Bank of Abu Dhabi ($43.62 billion).

The total assets of these banks reached about $530 billion, and their equity $68 billion, the chief of Arab banks said.

However, Al Rajhi BankAl Rajhi Bank led Arab banks in net profit for 2009 $1.8 billion.

Al Ahli Commercial Bank ($68.65 billion) leads Arab Islamic banks in assets, followed by Al Rajhi BankAl Rajhi Bank ($45.6 billion), Kuwait Finance House ($39.07 billion), Islamic Bank of DubaiIslamic Bank of Dubai ($22.97 billion), and Islamic Bank of Abu Dhabi ($17.46 billion).

Yousef said despite the positive global signals, the situation of the financial sector "is still far from what it was before the crisis," while financial stability is still facing serious challenges.

"New risks have emerged as a result of the outstanding and massive support given by governments to their financial sectors. The cost of this unprecedented support was a clear increase in sovereign risk and a consequent increase in the burden of sovereign debt," Yousef pointed out.

He argued that the increase in sovereign debt "in turn increases the risks that may play a role in threatening the financial stability in the future."

He maintained that the process of absorption of credit losses was still ongoing, with the support of increase in capital.

"But despite the increase in the capital of many banks, significant additional capital may be required to support the recovery of credit activity and to maintain economic growth under the new Basel expected standards for capital adequacy."

The profitability of global banks will be restricted in future if weakness in credit growth continues along with funding pressures and increase in capital, he said.

"This stresses the need to take firmer steps such as encouraging the restructuring of banks while ensuring sufficient margins to overcome the future shocks and generate additional amounts of capital reserves."

By Issac John

© Khaleej Times 2010