COUNTRY INDEX
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BAHRAIN |
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Best Bank: National Bank of Bahrain |
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Best Investment Bank: Sico Bank |
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National Bank of Bahrain (NBB) wins the award for Bahrain’s best bank this year, having taken advantage of higher interest rates and better provision requirements to boost its activities in the capital markets. All of this helped it to record a net profit of BD71 million ($188 million) for 2022, an increase of 29% year on year. The Manama-headquartered bank, which had total assets of BD4.8 billion at the end of March 2023, was particularly innovative in the digital and environmental, social and governance (ESG) areas.
The bank expanded its range of ESG-related products and services to enable customers to improve their own environmental footprint. This included retail financing for solar power and electric and hybrid vehicles. Its revamped mobile app led to more than 28,000 new digitally opened accounts in 2022, a 33% increase on the year before.
The strong performance came despite a lot of change at the bank. Jean-Christophe Durand retired as chief executive after a six-year tenure and was replaced by Usman Ahmed at the beginning of 2023. Durand led much of the digitalization and ESG work at NBB, and these efforts have continued after his retirement.
In the review period, the bank demonstrated its commitment to corporate sustainability and world-class best practices when it joined the United Nations Global Compact, the world’s largest corporate sustainability initiative. It also worked to reduce its own carbon emissions, with initiatives including the installation of solar panels across four branches of the bank, shifting to 100% recycled plastic cards and launching the ESG Academy to improve awareness of sustainability among employees.
Internally, the bank was able to boast an impressive 89% employee satisfaction rate in 2022.
The biggest and most complicated deal in the Bahrain markets in the review period was the acquisition of Bahrain’s Ahli United Bank (AUB) by Kuwait Finance House. Sico Bank played an important role on this landmark deal, acting as Bahrain receiving agent, Bahrain execution adviser and cross-listing adviser.
To say the AUB transaction was complicated is an understatement. The $10.9 billion deal marked the first acquisition of a non-Islamic bank by an Islamic bank and was one of very few cross-border bank mergers within the Gulf Cooperation Council (GCC) region. It was the third-largest banking acquisition in GCC history and was one of the first to require the cross-listing of shares on both the Bahrain Bourse and the Kuwait Stock Exchange after acquisition. The deal had been initially set to close in 2019 but was halted for three years due to Covid.
Other Sico Bank deals in the review period include advising Al Jazeera Tourism on the sale of the Novotel Al Dana Resort in Bahrain to Gulf Hotels Group, and advising Bahrain Family Leisure on its proposed merger with DGC Hospitality & Partners.
The bank, under the leadership of chief executive Najla Al Shirawi, also worked with Kuwait-based Wafra International Investment Company to set up the Sico-Wafra Fund, a sukuk fund for Shariah-compliant fixed income securities in the GCC.
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EGYPT |
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Best Bank: Commercial International Bank |
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Best Investment Bank: EFG Hermes |
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Commercial International Bank (CIB) has become the bank to beat in Egypt, having recorded yet another year of considerable growth. The bank’s consolidated net profits after tax reached E£16.2 billion ($523 million) in 2022, up by 22% versus 2021. Net interest income grew to E£31 billion in 2022, a 24% year-on-year increase. This momentum has continued in 2023, with CIB reporting consolidated net income of E£6.1 billion in the first quarter of 2023.
In Egypt, asset and loan growth remain key performance indicators, and CIB has proven itself in this regard, boosting its local currency deposit base by 18% and its foreign currency deposit base by 8%. As of September 2022, it held a 5.41% loan market share. Total assets grew to E£635.8 billion last year, up from E£498.2 billion in 2021.
CIB is also taking the lead on sustainability, launching a flagship programme for the integration of environmental, social and governance principles into Egypt’s small and medium-sized enterprises across different sectors in October 2022
In investment banking, EFG Hermes stands out through its presence on the biggest deals in the country in 2022.
The bank acted as a sell-side adviser on the acquisition of a 70% stake in two Egyptian maritime and terminal operating companies, Transmar International Shipping and Transcargo International, by Abu Dhabi Ports Group in a transaction worth $140 million.
It was also sell-side adviser to food company Auf Group on its sale of a majority stake to UAE’s Agthia.
EFG Hermes was also busy in the debt capital markets. It was sole financial adviser on the first securitization deal for a real estate mortgage company in Egypt, a $35.2 million securitization for Bedaya Mortgage Finance.
The team also advised leading real estate firm Orascom Development Egypt on a $81 million financing package.
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ISRAEL |
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Best Bank: Bank Leumi |
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Best Investment Bank: JPMorgan |
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Bank Leumi takes the award for Israel’s best bank this year. Its net income for 2022 was up 28%, reaching NIS7.7 billion ($2.15 billion) and its return on equity was 17%, compared with 15% in 2021.
It remains well capitalized, with a common equity tier-1 ratio of 11.46% and a liquidity coverage ratio of 131%. The deposit base grew by 8.2% to reach NIS557.1 billion at year-end 2022, while net lending jumped by 18.4%.
Under the leadership of chief executive Hanan Friedman, the bank has focused its growth strategy on the corporate, commercial and mortgage segments. It made a pre-tax capital gain of NIS524 million following the sale of its Tel Aviv headquarters ahead of its official relocation to the southern city of Lod.
Growing competition from neobanks in Israel has driven the incumbent banks to focus on digital innovation. Bank Leumi has launched FinTeka, an open banking subsidiary providing tailored solutions to the fintech community. Bank Leumi is also the first bank in Israel to provide a service enabling its customers to trade in cryptocurrencies.
In investment banking, JPMorgan stands out this year having worked on a number of landmark transactions in Israel. It was exclusive financial adviser to Pagaya Technologies in its special purpose acquisition company merger in June 2022.
The bank was also financial adviser to Tufin Software Technologies in its acquisition by tech-focused investment firm Turn/River Capital in August, a deal valued at $570 million.
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JORDAN |
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Best Bank: Arab Bank |
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Jordan’s banking sector has benefited from rising interest rates as the economy recovers from the pandemic and from inflation in the region remaining relatively low. In November last year, the IMF and the Jordanian government reached a preliminary agreement to increase total assistance to the kingdom to roughly $2 billion until 2024.
For Arab Bank, the biggest bank in Jordan, these favourable conditions have contributed to a good year. It reported a 73% growth in profits in the year ending December 2022, with net profit before provisions and tax reaching $1.35 billion, a 23% increase year on year. After-tax profit was $544.3 million, compared with $314.5 million in 2021.
The bank has also had a good start to 2023, reporting net income after tax at group level of $216 million, a 30% increase compared with the same period in 2022.
Its capital base remains strong, with a capital adequacy ratio of 16.64% and a liquidity coverage ratio of over 200%. Its non-performing loan coverage ratio stood at 139% for the period ending December 31, 2022.
Under the new chief executive Randa Sadik, who assumed the role in February 2022, the bank continues to be the partner of choice for small and medium-sized enterprises. Digital banking is also a strength in this area – in addition to its existing platform Arabi SME, Arab Bank launched Arabi Next, a mobile banking app specifically for SME clients.
The lender is also innovating in sector-specific services. In August 2022 it launched the Tabeeb Plus banking package tailored to meet doctors’ banking requirements and revamped its Arabi Extra programme for salaried employees working in the private and public sectors whose monthly salaries range from JD300 to JD699 ($423 to $985).
It is also the first bank to offer Apple Pay as a digital payments solution to clients.
Working towards meeting international standards, Arab Bank was the first in Jordan to publish a sustainable finance framework and has obtained a second-party sustainable opinion from S&P Global Ratings.
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KUWAIT |
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Best Bank: National Bank of Kuwait |
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Best Investment Bank: HSBC |
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National Bank of Kuwait (NBK) posted excellent financial results in the awards period and launched a range of initiatives in the digital and environmental, social and governance (ESG) areas. As a result, it is Kuwait’s best bank this year.
The bank achieved the highest profits in its history – a net profit of KD530 million ($1.7 billion) in 2022, representing a 39% increase year on year.
Its performance in the first quarter of 2023 was equally solid. NBK reported net profit of KD139 million, up 13% year on year. It also grew its asset book by 9.2% to KD36.5 billion while maintaining a non-performing loan (NPL) ratio of just 1.55% and a healthy NPL coverage ratio of 245%.
Last year, chief executive Isam Jasem Al Sager launched a new ESG strategy aimed at embedding ESG within all of its operations and business. The bank introduced a sustainable financing framework and increased its transparency by disclosing the environmental impact of its activities. The move underscores the bank’s role at the forefront of enabling sustainable economic development and supporting Kuwait’s Vision 2035.
NBK has continued work on revamping its digital offering and systems. The long process of extricating itself from legacy IT infrastructure and replacing specific pieces of functionality with new applications and services continues. The bank launched the new NBK Mobile app in early 2023 and has continued its work on Weyay – the first fully digital bank in Kuwait, which was launched in 2021.
The bank has also made big strides in wealth management. In collaboration with NBK Capital, it has made progress in the wealthtech space by introducing retail banking clients to investments through the NBK Mobile Banking app. It has added SmartWealth to the platform, which has improved onboarding functions, simplified financial transfers for investing and enabled users to have full online access to their portfolios.
The bank has also gone from strength to strength outside Kuwait – overseas operations now account for 27% of group net profits. In 2023, the aim is to leverage this further by focusing on cross-selling opportunities and growing business in core markets, particularly Egypt and the Gulf Cooperation Council (GCC) region.
Despite a difficult environment in Kuwait during the awards period, HSBC completed six loan deals worth a total of $820 million for a range of clients. The bank has more than 60 staff on the ground in Kuwait, including a dedicated global banking and markets team of 15 employees.
It acted as export credit agency coordinator and mandated lead arranger on a $1 billion financing for Kuwait Petroleum Corp (KPC). It also coordinated a new facility for KPC backed by Nippon Export Investment Insurance’s (Nexi) Overseas Untied Loan Insurance product, Nexi’s first facility in the Middle East and north Africa under its Lead initiative, in June 2022.
Another standout deal was the Agility Public Warehousing Company’s $825 million syndicated term loan. HSBC acted as mandated lead arranger and bookrunner in the deal, which was structured as a term loan facility with a 37-month tenor and was the largest financing related to a Kuwaiti financial institution since January 2010.
Benefiting from its onshore and offshore presence, HSBC also acted as an important partner for Kuwaiti corporates and institutions in international markets. One example of this was a $120 million evergreen repo with a Kuwaiti bank to support regulatory ratios in May 2022 and a $79 million Islamic repo with a Kuwaiti Islamic bank to support regulatory ratios. It also concluded a $150 million five-year Islamic cross-currency swap for an undisclosed client.
In M&A, the bank acted on one of the most important deals in the region, advising Kuwait Finance House on its 100% acquisition of Bahrain’s Ahli United Bank. The $10.9 billion deal was the third-largest banking acquisition in GCC history and was one of the first to require the cross-listing of shares on both the Bahrain Bourse and the Kuwait Stock Exchange.
HSBC also acted as a strategic ratings adviser to KipCo on its merger with Al Qurain petrochemicals. The ratings advisory covered KipCo’s management strategy, liquidity and debt options.
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OMAN |
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Best Bank: Bank Muscat |
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Best Investment Bank: Sohar International |
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Bank Muscat is once again Oman’s best bank in Euromoney’s awards. The bank has maintained its position as the market leader in the country with $33 billion in assets, posting a net profit of OR200.8 million ($522 million) for the year, up from OR89.6 million in 2021.
The bank’s investment activity also performed well with non-interest income up 12.9% year on year in 2022.
Bank Muscat operates across personal, corporate, wholesale and Islamic banking, and introduced a number of important initiatives during the review period. One involved the launch of digital customer onboarding. It also introduced a soft token app for internet banking customers, as well as online applications for products such as credit cards and mutual funds.
These initiatives have already borne fruit as the bank has now acquired more than 1.4 million digital banking users.
Digital banking initiatives have also driven growth in the corporate space.
The bank launched a new DigiTrade portal and a Visa virtual corporate credit-card solution during the year, offering real-time transaction security and control over corporate transactions. As a result, the volume of transactions processed through the bank’s corporate online banking channels reached OR8 billion in 2022.
The bank also achieved another important milestone this year. Bank Muscat Money Market Fund’s assets under management crossed the OR90 million mark, making it the largest open-ended fund in Oman. The bank’s Islamic banking subsidiary, Meethaq, which celebrated its 10th anniversary in 2022, is also going from strength to strength.
Sohar International had a standout year in Oman during the awards period. Despite being established only two years ago, it is now set to become the second-largest bank in Oman once its acquisition of the assets of HSBC Oman is completed in the second half of 2023. The newly combined bank is expected to have an asset base of $16.5 billion and will see Sohar almost double in size.
The Muscat-headquartered bank acted on six deals across equity capital markets, debt capital markets and M&A in the awards period. It acted as financial adviser and issue manager for the OR23 million ($59.7 million) Pearl Reif IPO on the Muscat Stock Exchange, the largest IPO on the exchange since 2015. The deal was 1.5 times oversubscribed and was the first real-estate investment fund in Oman to incorporate leverage.
Another standout deal was the first-of-its-kind Oman Qatar Insurance Company open offer for 11,500,000 ordinary shares at OR2.3 million, on which Sohar acted as sole financial adviser and issue manager.
The investment banking team also worked on Sohar International’s own rights issue in September 2022, which contributed to the development of Oman’s secondary markets. The bank raised OR160 million. The funds raised are earmarked for meeting the bank’s ambitious strategic growth objectives outlined by chief executive Ahmed Al Musalmi.
At the beginning of 2023, the bank also supported the Invest Oman initiative as main sponsor.
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QATAR |
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Best Bank: Qatar National Bank |
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Best Investment Bank: Standard Chartered |
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All eyes were on Qatar last year as the country hosted what it claimed to be the first carbon-neutral football World Cup. For Qatar National Bank (QNB), the tournament was an opportunity to showcase its position not just as the country’s biggest bank but also its strongest.
The bank achieved a net profit of QR14.3 billion ($3.93 billion) in 2022, a 9% year-on-year increase; operating income grew by 24% to reach QR35.1 billion. Customer deposits grew by 7% to QR842 billion, while loans and advances grew by a similar percentage, driving asset growth to 9% for the year with total assets of QR1,189 billion.
Return on average equity was 17.3%, up from 16.4% the previous year, and a return on average assets was 1.3%, up from 1.25%.
The bank’s non-performing loan ratio rose slightly to 2.9% and QNB has provisioned QR8.8 billion against potential loan losses. Its coverage and loan-to-deposit ratios remain steady at 99% and 95.9% respectively.
The bank continues to push the boundaries of digital innovation and this year rolled out a contactless biometric payment acceptance solution.
It is also making progress on sustainability, finalizing its sustainable finance and product framework during the awards period. It has received a second-party opinion from ISS Corporate Solutions, expanding its preexisting green, social and sustainability bond framework.
Standard Chartered topped the debt capital markets league table in Qatar in the awards period, completing 20 transactions with a total value of $1.68 billion. This saw it jump from sixth to the top of the DCM league table, with a 55% market share.
Under the leadership of a new chief executive for Qatar, Muhannad Mukahall, Standard Chartered worked with Siemens Energy to announce the issuance of the first green guarantee in the state of Qatar in March this year to assist the financing of a solar-power project as part of the country’s national climate-change action plan.
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SAUDI ARABIA |
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Best Bank: Saudi Alawwal Bank |
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Best Investment Bank: HSBC |
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The final integration of Saudi Arabia British Bank (SABB) and Alawwal Bank to form Saudi Alawwal Bank (SAB) was completed in March 2022; and the benefits of the merger have been amply demonstrated over the awards period.
Under the leadership of chief executive Tony Cripps, SAB posted strong financial results, with a 52% jump in net income to SR4.9 billion ($1.31 billion). In the first quarter of 2023, the bank continued to thrive, posting a 76% year-on-year increase in profit to SR1.8 billion.
The bank has benefited from strong net special commission income, the product of increasing volumes combined with higher rates and improved fees. Assets stood at SR314 billion at the end of December 2022.
Innovations in products and services over the awards period included improved remittance offerings and end-to-end digital services for small and medium-sized enterprise clients. The bank continues to work with blockchain technology to enhance product offerings.
SAB has continued to benefit from its relationship with HSBC and the international footprint that comes with it. In the review period, the bank launched a new international payments service, enabling SAB customers to view balances of HSBC accounts in 17 countries and transfer funds instantly to linked accounts.
This wasn’t the only remittances initiative in 2022. In September, SAB joined Buna, the Arab payment system operated by the Arab Monetary Fund enabling customers to send and receive cross-border multicurrency payments in a safe, cost-effective and transparent manner.
SAB is the first bank in Saudi Arabia to work with blockchain technology to offer letters of credit for trade customers, as part of Contour. In its wealth and personal banking side, the bank has launched Premier 3.0, its enhanced wealth proposition.
In October, the bank agreed to plant one million trees across the kingdom – Saudi Arabia’s largest environmental project initiated by the finance sector. It was also the first Saudi financing institution to initiate a green deposit, bringing together complimentary Islamic banking and environmental, social and governance principles.
As at March 2023, the green deposit portfolio accounted for 10.3% of Islamic term deposits held by retail clients, having seen portfolio growth of 350% over the second half of 2022.
SAB bank has focused on creating end-to-end digital journeys, enabling customers to apply for services without the need to visit a branch. It has launched a fully digital account opening onboarding service for SMEs, using the government’s new national, digital identity register, Nafath.
HSBC stood out as Saudi Arabia’s best investment bank this year. The bank topped the equity capital markets league table, completing seven deals with a total value of $2.4 billion, giving it a 27% market share. In debt capital markets, HSBC advised on 15 deals, with a total value of $3.4 billion.
The bank’s work on Luberef’s $1.3 billion IPO proved instructive. HSBC acted as joint financial adviser, joint global coordinator, joint bookrunner and underwriter and generated more than 50.1% of demand in the book with a large number of sole orders, more than any other bank in the syndicate. This was due to its unique setup bridging high-quality Saudi demand with international emerging-market investors.
HSBC worked on a number of firsts in the review period, including acting as joint bookrunner and underwriter of the $1.8 billion Americana IPO – the first dual listing across Tadawul and the Abu Dhabi Securities Exchange and the largest IPO on Tadawul since 2020. It also acted as sole financial adviser and joint underwriter on the $2.1 billion Petro Rabigh rights issue in 2022.
It also drove the development of the follow-on equity markets in Saudi Arabia with its work on the Public Investment Fund’s sell-down of its stake in Tadawul with a $610 million accelerated book-build offering.
In DCM, key deals included the Greensaif Pipelines $4.5 billion triple-tranche issuance in February 2023. This involved the first sukuk project bond in the international capital markets, the first dual-listed formosa project bond and the largest-ever order book for a project bond from the Middle East and north Africa.
HSBC also topped the deal table in M&A. Notable deals included the Industrialization and Energy Service Company’s acquisition of Al Mansoori Petroleum Services and food delivery app Jahez’s acquisition of dessert delivery platform The Chefz – its largest acquisition to date at SR650 million ($173 million).
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UAE |
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Best Bank: Emirates NBD |
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Best Investment Bank: Citi |
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Last year was one of growth on all fronts for Emirates NBD, which benefited from buoyant economic conditions across the region. The Dubai-based bank saw a 40% jump in net profit in 2022 to Dh13.0 billion ($3.54 billion), driven by thriving activity across its Islamic division, private bank, investment bank and core banking business.
New corporate lending grew by Dh50 billion, while current and savings accounts grew by Dh20 billion. Costs were improved, with the cost-to-income ratio down from 30.8% in 2022 to 25.3% at the end of March 2023.
In retail banking and wealth management, Emirates NBD had a standout 2022, achieving its highest-ever revenue and strongest-ever acquisition of loans and credit cards.
Loan origination was up 39%, credit-card acquisitions grew by 100% and card spend grew by 31% year on year. Under the leadership of chief executive Shayne Nelson, the bank also invested further in its international network, opening new branches in Saudi Arabia, Egypt and India in the awards period.
In September, the bank’s retail banking and wealth management division launched a three-month promotional campaign in response to growing consumer demand for banking and payments services via digital channels. Emirates NBD’s DirectRemit is one of the fastest such remittance services in the UAE, allowing customers to send money home using online or mobile banking in just 60 seconds.
The bank also rolled out its enhanced mobile banking app, ENBD X, which improved the credit-card and personal loan application process and enabled instant credit approval.
On the capital markets side, Emirates NBD has launched a series of strategic investment funds to support investment in UAE IPOs including Dewa, Tecom and Salik.
Nelson appointed Vijay Bains as the bank’s first chief sustainability officer and group head of environmental, social and governance (ESG) in 2022 and has created a department to focus on developing an ESG framework and ratings.
Citi is the UAE’s best investment bank. The awards period in the UAE saw one of the largest IPOs of the year – the $6.1 billion mega IPO of the Dubai Electricity and Water Authority. Citi acted as a joint global coordinator on the deal, which was the UAE’s largest-ever IPO and the largest utilities IPO globally since 2008. The bank held around 80 interactions with investors and helped generate interest that saw 37 times coverage with an $86 billion order book.
Another standout deal was Abu Dhabi’s $2 billion Borouge IPO – the largest-ever chemicals IPO in the Europe, Middle East and Africa region. On the deal, Citi drove the valuation thesis and led the investor dialogue, while playing the leading role on the capital structure and dividend policy analysis.
The bank also worked on Empower’s $725 million IPO, the largest-ever offering in the global steam and air-conditioning sector.
In M&A, Citi acted as the exclusive financial adviser to Abu Dhabi National Oil Company on its acquisition of a 24.9% stake in OMV from Mubadala in December 2022.
In debt capital markets, Citi acted as a joint lead manager and bookrunner on Emirate of Sharjah’s inaugural sustainable bond in February 2023. The $1 billion nine-year bond marked the first ESG-labelled offering from a Gulf sovereign and had a diversified order book with 78% of investors from outside the Middle East and north Africa region.
The bank also acted as joint lead manager, a joint bookrunner and fiscal and paying agent on the UAE’s $3 billion bond in June 2022.
