Arab 100 2001: Solid earnings growth for most Arab banks
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BANKING

Arab 100 2001: Solid earnings growth for most Arab banks

The majority of Arab banks enjoyed a good year in 2000 as most of the main Arab countries recorded solid rates of GDP growth, benefiting from the continued high price of oil. Reflecting this, the top 100 Arab banks saw net profit rise by 15% in 2000 on an aggregated basis. The overall return on equity rose to 14.1% in 2000 from 13.2% in 1999, and the return on assets increased to 1.3%.

Results table


       
Saudi American Bank: it has returned to
profitability with returns among the
region's highest

The largest 20 banks dominate the top 100 Arab banks, with a high 57% of the combined capital base, 53% of assets and 63% of consolidated net profit. The aggregated return on equity (ROE) for the top 20 banks, at 15.3%, is higher than the overall sector average, as is their average return on assets (ROA) of 1.6%. Their rise in ROE was particularly significant - from 13.7% the previous year. These figures indicate the increasing advantage of size and resources in respect of margin control, a diversified earnings base, and economies of scale. Saudi Arabian banks dominate the top 20 banks, with seven institutions coming from the Kingdom. The Saudi banking sector continues to be the largest and strongest banking sector in the region, aided by the tightly regulated nature of the system.


Arab Banking Corporation (ABC), headquartered in Bahrain, is the largest of the Arab banks by total capital.



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