World’s Best Banks: Middle East Country Winners

Middle East

Change Creates New Opportunities

Banks in the Middle East are pulling in their horns in light of the widespread political upheaval in the region. Markets have been unsettled by the political developments, but the economic fundamentals remain positive. Ironically, the rise in the oil price as a result of the uprisings is underpinning the growth of many Middle East economies, enabling governments in the region to increase spending on social programs and infrastructure, which is helping to boost the private sector.

The sudden political change is disrupting business activity in the short term, but the longer-term outlook is more promising. Change will create opportunities that did not exist previously. Improved transparency and reforms could lay the groundwork for a better future for the youthful and growing populations of many Arab countries. The big question is: How do we get there from here?

The key economies of the region are expected to grow about 6% in real terms this year, with gas-rich Qatar realizing growth of about 20% in real gross domestic product. Many banks in the region are still struggling to clean their books of nonperforming loans, but they are also getting closer to the day when they will start lending more freely once again. Nevertheless, the region is still recovering from the global recession, and the oil price shock threatens to derail the global recovery.Whatever happens in the Middle East will have major repercussions worldwide.

Regional W inners

National Bank of Kuwait

National Bank of Kuwait, the highest-rated bank in the Middle East, has continued to perform well despite the ongoing turmoil in global financial markets and the political unrest in the region. NBK’s earnings rose 14% in 2010 to a record $1.1 billion.

“As a leading regional bank operating in 17 countries, NBK continued to enjoy a highly recognized brand in the financial services sector and is indeed among the leading brands across the MENA [Middle East and North Africa] region,” says Ibrahim S. Dabdoub, group CEO of NBK. “Our superb asset quality and capitalization continue to differentiate us from most regional banks in times of growing concerns on the wellness of financial institutions across the globe.”

Global Finance ranked NBK the safest bank in the region for the third consecutive year in 2010. “NBK’s world-class credit ratings assert our strong financial position, long-term positive outlook, sound risk-management practices and the stable and highly proficient management team,” Dabdoub says.

In addition to its 70 branches in Kuwait, which is more than any other bank has, NBK has a growing regional and international network of 107 branches.


“NBK continued to enjoy a highly recognized brand in the financial services sector [in] the MENA region”

“Our superb asset quality and capitalization continue to differentiate us from most regional banks” – Ibrahim S. Dabdoub, group CEO, NBK

Ibrahim S. Dabdoub, group CEO

Country Winners



Ahli United Bank

Ahli United Bank’s earnings rose by 32% last year to $266 million, with a 9% rise in net interest income, and the bank saw a decline in nonperforming loans. However, the political uprising in Bahrain is taking the shine off the bank’s performance. In March, Standard & Poor’s lowered the bank’s credit ratings to BBB/A-3 from A-/A-2, and kept AUB on credit-watch with negative implications. The action followed a two-notch downgrade of Bahrain. AUB also has been rapidly expanding in Egypt, which faces political uncertainties of its own. The Bahrain-based bank increased its ownership in AUB Egypt to 85.1% last year through two tender offers. In March 2010, AUB acquired a 40% stake in United Bank of Commerce and Investment, based in Libya.


Adel A. El-Labban, group CEO and managing director


Commercial International Bank

Commercial International Bank (CIB) reported a 15% rise in earnings for 2010, but the recent political developments in the country are expected to have a significant impact on the banking sector. There likely will be a slowdown in lending and an increase in investments in treasury bills, for example. CIB’s loans outstanding rose by 27% in 2010. The bank has the largest network among private sector banks in Egypt, with more than 150 branches and over 500 automated teller machines. CIB has a strong corporate banking franchise and a rapidly growing retail business.

Hisham Ezz Al-Arab, chairman and managing director


Bank Melli Iran

Bank Melli Iran is the world’s largest Islamic bank and the biggest bank in Iran in terms of assets, deposits and loans. Bank Melli was founded in 1927 as the country’s first commercial bank. It now has more than 3,300 branches there. As the country’s former central bank, Bank Melli conducts more government-related banking and foreign exchange operations than other banks in Iran. It is also the leader in project finance and trade finance. Iran has the largest level of shariah-compliant assets of any country, more than double the total Islamic assets of Saudi Arabia, which is number two. Iran’s top banks have been excluded from most international business because of sanctions.

Mahmoud Reza Khavari, chairman and managing director


Commercial Bank of Iraq

Commercial Bank of Iraq (CBIQ) is one of the largest private sector banks in Iraq, with nine offices in Baghdad and one in Basra. CBIQ offers a full range of services to retail and corporate clients. Bahrain-based Ahli United Bank (AUB) acquired a 49% stake in CBIQ in December 2005, and it held a majority interest of more than 56% at the end of 2010. AUB agreed in March 2011 to grant telecom company Zain’s Iraq subsidiary a $50 million loan as part of a $400 million credit facility from the IFC, the World Bank’s investment arm. The proceeds will help Zain expand and improve telecom services in Iraq.


Basil Al-Dhahi, CEO and managing director


Mizrahi Tefahot Bank

Mizrahi Tefahot is Israel’s leading mortgage lender. It prides itself on its prudent lending. In 2010, Mizrahi Tefahot says, it led the pack among Israel’s five largest banks across a number of indicators including return on equity (11.6%), up from 9.1% in 2009. The bank’s net profit in the first nine months of 2010 increased 40% to 582 million shekels ($159 million). When it comes to managing operating expenses as a percentage of total income, Mizrahi Tefahot claims to be the most efficient bank in Israel, with an efficiency ratio of 61% in the first nine months of 2010.


Eliezer Yones, CEO


Arab Bank

Arab Bank, based in Amman, Jordan, has a network of more than 500 branches in 30 countries spanning five continents. Its geographic diversification and strong capitalization enable it to respond flexibly to opportunities as they arise. The bank has proven capabilities in project, structured and corporate finance. It has expanded its retail business significantly in the past few years and recently introduced several products aimed at the region’s growing numbers of young people. Arab Bank’s earnings fell for a second straight year in 2010, mainly due once again to increases in loan-loss provisions. Total assets rose to $51.1 billion at the end of 2010 from $50.5 billion at the end of 2009.


Nemeh Sabbagh, CEO


National Bank of Kuwait

National Bank of Kuwait, the country’s largest lender, was founded in 1952 as the first indigenous bank in the Arab Gulf. Its prudent lending and disciplined risk-management techniques have made it the highest-rated bank in the region. NBK gained access to Kuwait’s growing Islamic banking market with its purchase in 2009 of a 40% stake in Boubyan Bank, which was increased to 47% in April 2010. Boubyan Bank competes with Kuwait Finance House and Kuwait International Bank for clients who prefer shariah-compliant banking. NBK also leads in corporate banking and has a market share of more than 70% with foreign companies operating in Kuwait.


Ibrahim S. Dabdoub, group CEO


Bank Audi

Bank Audi has one of the largest branch networks in Lebanon, with 73 regular branches and two private-banking offices. Altogether, it operates 157 branches in the Middle East and North Africa. As of December 31, 2010, it was number one among Lebanon-based banks in terms of assets, loans and earnings. “This award is an important recognition for a collective and sustained effort undertaken with extreme vigor over the past few years and which led the bank to its leading position in its domestic market and its privileged position among the top 20 Arab MENA banks through a successful presence in six countries in the region,” says Samir Hanna, group CEO. Bank Audi, a universal bank, has a leading position in domestic and regional capital markets activities, as well as private banking. It also offers insurance, savings and retirement products under the Aman brand.


The bank has made “a collective and sustained effort … with extreme vigor over the past few years”

As a result, it has a “leading position in its domestic market and [a] privileged position among the top 20 Arab MEN A banks” – Samir N. Hanna, group CEO, Bank Audi

Samir N. Hanna, group CEO



BankMuscat is Oman’s largest bank, with 129 domestic branches and a 38% market share in terms of credit. The bank also has a growing international presence. It owns 49% of BMI Bank, based in Bahrain, and 43% of Mangal Keshav, a stock brokerage based in India. BankMuscat has branches in Riyadh, Saudi Arabia, and Safat, Kuwait, as well as a representative office in Dubai. Oman is diversifying its economy to become less dependent on dwindling oil resources. The Duqm Port project is at an advanced stage of construction and contracts will be awarded soon for landside infrastructure. The project will include setting up industrial areas and special economic zones.

AbdulRazzak Ali Issa, CEO


Qatar National Bank

Qatar National Bank’s earnings rose by 35.8% in 2010, while its assets grew by 24.6%. Earnings at its shariah-compliant bank, QNB Islami, increased by 115%. QNB is the largest bank in Qatar with 43 conventional branches and 16 Islamic branches. The bank is benefiting from its international expansion and its effective risk management. Its ratio of nonperforming loans—0.9%—is one of the lowest in the region. Meanwhile, Qatar’s economy continues to boom, supported by growing oil and gas revenues and strong public spending, which has boosted private sector activity. Qatar is the world’s largest LNG producer. Infrastructure projects will get a further lift from the fact that Qatar will host the 2022 FIFA soccer World Cup. The country’s real gross domestic product is forecast to grow about 20% this year.

Ali Shareef Al-Emadi, group CEO

Saudi Arabia

Samba Financial Group

Samba Financial Group is the highest-rated bank in Saudi Arabia, with healthy liquidity and capital ratios. It is one of the kingdom’s leading banks, with a 14% market share in terms of assets. “The award highlights the consistency instilled in Samba’s growth strategy and recognizes the strides the bank has taken to deliver innovative products and outstanding customer service, while providing true stakeholder value,” says Eisa Al-Eisa, chairman of Samba Financial Group. Samba Financial continues to expand its international presence. In April 2010, it opened a branch in Doha, Qatar. Its subsidiary in Pakistan has 28 branches spread across major cities. The bank opened a Dubai office in 2008, and it has maintained a branch in London for more than 20 years. “Samba is renowned for its technical and service excellence, setting the benchmark in the banking industry, not only in the Kingdom of Saudi Arabia but across the region,” Al-Eisa says.


“Samba is renowned for its technical and service excellence, setting the benchmark in the banking industry”

The bank delivers “innovative products and outstanding customer service, while providing true stakeholder value” – Eisa Al-Eisa, chairman, Samba Financial Group

Eisa Al-Eisa, chairman


Bank of Syria and Overseas

Bank of Syria and Overseas, a subsidiary of Lebanon-based BLOM Bank, was one of the first private sector banks to open in Syria, where it began operations in 2004. With 25 branches, including nine in Damascus, BSO has a 20% market share of deposits. It was the first bank to issue the Visa International card in Syria. BSO leads in trade finance and corporate loans, and it offers a full line of commercial banking services. BSO and BLOM Bank are major shareholders in insurer Arope Syria.

Georges Sayegh, general manager

United Arab Emirates

Emirates NBD

Emirates NBD has the leading retail-banking franchise in the UAE, with 135 branches. Among the biggest banks in the region in terms of assets, it is Dubai’s largest bank by market value. Emirates NBD reported sharply higher fourth-quarter earnings in 2010, but its full-year results were hurt by nonperforming loans. The bank is 56% owned by the Investment Corporation of Dubai, the emirate’s sovereign wealth fund, and has significant exposure to Dubai World, the state-linked conglomerate that restructured $25 billion of debt last year.

Rick Pudner, CEO


Arab Bank Yemen

Arab Bank Yemen was the first bank to introduce ATMs and modern banking services to Yemen. The country at the southwest corner of the Arabian Peninsula has been plagued with political unrest in recent months. Yemen LNG told customers that the unrest could lead to supply disruptions and possible force majeure. In March 2011, Yemen LNG loaded its 100th LNG carrier at Balhaf. A ship chartered from Maersk under a 20-year contract sailed for the Isle of Grain in the UK, where Yemeni LNG is sold on the European market.

Omar Ibrahim al-Sous, country manager


alt The World Best Banks 2011: Country Winners