BEST BANK
Al Rajhi Bank
BEST DEBT HOUSE
Samba
BEST EQUITY HOUSE
HSBC/Saudi British Bank
Sceptics about Middle East banking sometimes suggest that there is no real competition for business in the region and that the market is dominated by a very few banks. Saudi Arabia gives the lie to this claim.
Not only are their many excellent banks, but to be the best requires a particular skill at present as this is a rapidly evolving market – Islamic financial services are developing at an unprecedented rate while the rapidly expanding capital market presents new challenges and opportunities. Getting the right balance of products and services requires immense skill.
The judges were spoilt for choice. The traditional powerhouses of the market, National Commercial Bank and Samba, have performed well. Riyad Bank and Arab National Bank are producing excellent results.
But the winner is Al Rajhi, which can rightly claim to be the best Islamic retail bank in the world and has in Saudi Arabia outperformed all rivals in the conventional sector as well.
It has the best return on equity, the highest share of deposits and the strongest growth in net income. It is also top in local share trading and money transfers.
Samba, whose investment banking operation is now of the highest standard, wins the best debt house award for its involvement in what is the leading Islamic transaction of this – or indeed any other – year.
The bank was the key driver in raising the $2.35 billion bridge financing for the new mobile phone operator in the kingdom, Etihad Etisalat (now know as Mobily). This is the largest Islamic facility ever syndicated – as well as being the largest debt transaction ever in the Middle East.
Samba played the leading role in resolving a number of structuring and inter-creditor issues – and did so in only five months. Indeed the issue was so popular that it was 40% oversubscribed.
In conjunction with NCB, Samba also arranged a SR10.37 billion ($2.8 billion) guarantee facility in favour of CITC. And it did so in a record time of two weeks.
There has been tough competition from Samba and National Commercial Bank for best equities house but the award is won by HSBC and Saudi British Bank for their role in the flotation of Al Marai Dairies and the $400 million privatization of insurance company NCCI.
There have been many ground-breaking IPOs in the past couple of years. But the sale of Al Marai is arguably the most significant as it is the first time that a company is converting from being a limited liability operation to a joint stock one at the same time as floating on the market and is creating a template for future transactions. It is also the first that is being underwritten by a consortium of banks.
While some of the flotations in the past year have been issued at par, those for Al Marai and NCCI stand out as they are being done at a premium and have involved comprehensive disclosure.
HSBC has also been responsible for rights issues made by three quoted Saudi companies.
