13 July 2015

Eight Saudi lenders made it on The Banker's 2015 list of top Middle East banks.

Saudi Arabia's National Commercial Bank and Qatar National Bank emerged as the Middle East's top financial institutions in the latest rankings by The Banker.

The survey ranked the world's top 1,000 banks based on Tier 1, which is viewed by regulators as a key measure of a bank's financial strength. National Commercial Bank (NCB) ranked first in the region with a Tier 1 Capital of USD 12.2 billion.

NCB failed to crack the world's top 100 banks club, coming in at 106 globally. Qatar National Bank was a rung below, at 107, with Tier 1 capital of just over USD 12 billion while Saudi-based Al Rajhi Bank came in the regional top 20. 

The UAE's Emirates NBD and Saudi Arabia's Samba Financial Group rounded out the top five to take fourth and fifth, respectively.

"Eight Saudi lenders are present in the Middle Eastern top 25, with National Commercial Bank once again taking the top spot. Yet this year, however, the gap to second place has narrowed appreciably," The Banker said in the report issued late last month.

Regional banks enjoyed a strong first quarter this year, after a stellar 2014. Standard & Poor's said GCC banks remained strong despite headwinds from a weakening global economy and lower crude prices. But it expected limited earnings growth in 2015.

"Although nonperforming loans are now manageable, we believe they will begin to gradually accelerate," said S&P credit analyst Timucin Engin. "As a result, credit losses will slightly increase--from about 67 basis points compared to average gross loans in 2014--limiting earnings growth this year for GCC banks to the mid-single digits."

Islamic lenders also came to the fore in The Banker survey. Seven of the top 10 highest movers in the Middle East are sharia compliant, compared with just three - excluding Iranian lenders - in the 2014 ranking, The Banker said.

"Building on last year's success in the return-on-capital regional ranking, Iranian banks secured the top five positions. Nevertheless, Iran's lenders are relatively under-capitalised compared with other jurisdictions in the Middle East rankings," it added.

Globally, the world's biggest banks continued to lose ground to Chinese rivals, with three Chinese banks taking the top five places, according to the report.

© The article was published exclusively for Zawya.com by alifarabia.com.

© Zawya 2015