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The Most Powerful Banks in the Arab World

Arab banking has not suffered much at all from the financial crisis that has gripped the rest of the globe. While there is a secure future ahead for most Arab banks, a few regions are facing some problems. Carelessness with credit has weakened those banks, but not to a critical point.

Arab banks and Islamic banks have a history of making safer and more calculated moves than Western banks, but they did not escape the crisis completely untouched. There have been profit declines over the last couple of years. In spite of the decline in profits, Arab banking institutions, both conventional and government have seen steady growth with no sign of slowing down.

The Gulf Corporation Council was established in 1981 as a means to resist outside involvement in the Gulf. Members of the GCC include Saudi Arabia, Oman, Qatar, Bahrain, United Arab Emirates (UAE), and Kuwait. The GCC works to strengthen the economy of the Gulf countries by encouraging cooperation between the countries in areas of mutual infrastructure.

The most powerful banks in the Arab world can be ranked by several different factors, including assets, capital and geographical distribution of each. While Saudi Arabia contains the largest financial part of the region, United Arab Emirates is a close second at only 4% less than Saudi in terms of total Tier 1 capital.

Saudi Arabia's National Commercial Bank leads the pack in terms of capital, but comes in second to Emirates NBD of the United Arab Emirates in terms of assets. The National Bank of Abu Dhabi and Abu Dhabi Commercial Bank are the other two United Arab Emirates banks in the top ten lists of both capital and assets, while Saudi Arabia has three other banks in the top ten -Samba Financial Group, Al Rajhi Bank and Riyad Bank.

The National Bank of Kuwait and the Kuwait Finance House are the only two banks from Kuwait to make the top ten in terms of capital and assets, but the country of Oman, which is considerably bigger, has only one bank in the top 40 - Bank Muscat.

In terms of geographical distribution of assets and capital, Saudi Arabian banks lead yet again according to the index by The Finance Website, with United Arab Emirates in a very close second. The remaining four Arab countries of Bahrain, Kuwait, Oman, and Qatar are distantly following. It may come as no surprise that Saudi Arabia is ahead since they are the largest country, but United Arab Emirates is considerably smaller, even smaller than Oman. The one factor in the Uses favor is the city of Dubai, which is heavily populated and enjoys a diverse economy.

Banking and finance are two huge pieces of the Arab economic success formula. Almost half of the top 150 companies are in those sectors. The global economy is changing and with oil revenues dropping, Arab banks will possibly need to look at branching out into the global arena if they wish to remain powerful. Lowered oil profits will ultimately lead to less spending by the government and less money for new investments.

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