World’s Safest Banks 2016: Safest Islamic Banks

Al Hilal Bank takes Islamic crown as Saudi sovereign rating slides.

Abu Dhabi’s Al Hilal Bank is the safest Islamic bank in the six GCC states, replacing Al Rajhi Bank of Saudi Arabia, which falls to seventh position following downgrades prompted by the downgrading of the Saudi government. Kuwait Finance House moves up to second position, and Abu Dhabi Islamic Bank moves up to third.

Global Finance’s ranking of Islamic banks in the GCC includes all banks that conduct only shariah-compliant business. In line with the methodology used in the other rankings, banks that are 100% subsidiaries of other banks are not eligible for inclusion.

There are 26 such banks in the GCC. Three are rated by all three of the major credit rating agencies, and 10 have ratings from two. (The three triple-rated are Kuwait Finance House, Al Rajhi Bank and Sharjah Islamic Bank.) Warba Bank, of Kuwait, was rated by Moody’s in late 2015 and by Fitch in mid-2016, taking the number of banks with two or more ratings to 13, compared with 12 last year. Seven banks have a rating from one of the three agencies, the same number as last year, and six are unrated, one fewer than last year.

The banks’ ratings reflect (but are not always precisely determined by) ratings on the countries in which they are based. As a result, banks in Kuwait, Qatar, Saudi Arabia and the UAE tend to enjoy high ratings, whereas banks in Bahrain do not. There are only two Islamic banks in Oman (excluding those that are wholly-owned subsidiaries of conventional banks). Both are small and neither is rated.

None of the Islamic banks score high enough to be included in our Global ranking, although eight are included in the Emerging Markets list. None are included in the Safest Commercial Banks list. Al Hilal Bank’s ratings are the same as those at the lower end of the Commercial Banks ranking, although its asset size is smaller than those with 17 points that are included; more important, as a bank owned by state-owned Abu Dhabi Investment Council, it is ineligible for that list.

THE Safest Islamic Banks
Banks with two or more ratings
Rank	Group Name	Country	Ratings			Total Score	Assets $ mn	Statement Date
Rank	Group Name	Country	Fitch	Moody’s	S&P	Total Score	Assets $ mn	Statement Date
1	Al Hilal Bank	UAE	A+	A1	N/R	17	11,734	12/31/15
2	Kuwait Finance House	Kuwait	A+	A1	A-	16	54,454	12/31/15
3	Abu Dhabi Islamic Bank	UAE	A+	A2	N/R	15.5	32,234	12/31/15
4	Ahli United Bank (Kuwait)	Kuwait	A+	A2	N/R	15.5	12,864	12/31/15
5	Barwa Bank	Qatar	A+	A2	N/R	15.5	12,418	12/31/15
6	Qatar International Islamic Bank	Qatar	A+	A2	N/R	15.5	11,137	12/31/15
7	Al Rajhi Bank	Saudi Arabia	A	A1	BBB+	14	84,165	12/31/15
8	Qatar Islamic Bank	Qatar	A+	N/R	A-	14	34,898	12/31/15
9	Boubyan Bank	Kuwait	A+	Baa1	N/R	12.5	10,323	12/31/15
10	Dubai Islamic Bank	UAE	A	Baa1	N/R	11	40,816	12/31/15
11	Sharjah Islamic Bank	UAE	BBB+	A3	BBB+	11	8,137	12/31/15
12	Warba Bank	Kuwait	A+	Baa2	N/R	11	2,558	31/12/15
13	Bank AlJazira	Saudi Arabia	A-	Baa1	N/R	9.5	16,870	12/31/15
Banks with one rating
Rank	Group Name	Country	Ratings			Total Score	Assets $ mn	Statement Date
Rank	Group Name	Country	Fitch	Moody’s	S&P	Total Score	Assets $ mn	Statement Date
1	Kuwait International Bank	Kuwait	A+			N/A	5,898	12/31/15
2	Masraf Al Rayan	Qatar		A2		N/A	22,795	12/31/15
3	Alinma Bank	Saudi Arabia	A-			N/A	23,660	12/31/15
4	Bank Albilad	Saudi Arabia		A3		N/A	13,645	12/31/15
5	Noor Bank	UAE	A-			N/A	10,746	12/31/15
6	Al Baraka Islamic Bank	Bahrain			BB+	N/A	24,618	12/31/15
7	Bahrain Islamic Bank	Bahrain		Ba3		N/A	2,408	9/30/15
Asset figures for banks with two ratings or one rating are provided by Fitch Solutions (even if they are not rated by Fitch).