Top Islamic banks post strong asset growth

Published: 2009/08/27

The world's top 100 Islamic banks managed to grow their assets by two-thirds last year, at a time when their conventional rivals were struggling to deal with the global financial crisis.
They had US$580 billion (RM2 trillion) of assets in 2008 as against US$350 billion (RM1.2 trillion) in 2007, according to The Asian Banker, a research company.

Bank Melli Iran (BMI) was the top lender in terms of assets, while Saudi Arabia's Al Rajhi Bank came in second."Iranian banks are still the predominant Islamic banking players, holding seven out of the top 10 ranks and 12 of the 100," The Asian Banker said in its analysis.This means that Iranian banks hold 40 per cent of the top 100's total assets.

Malaysia's 14 Islamic banks, with US$56.22 billion (RM198 billion) collectively, accounted for just under a tenth of the total.Another 40 per cent of the top 100 assets are under banks in Malaysia, the United Arab Emirates, Saudi Arabia and Kuwait.The remaining 20 per cent of assets is spread out between Islamic banks in 10 other markets.

The top 100 Islamic banks performed well last year, with average asset growth of 29.7 per cent and average net income growth of 29.6 per cent."Despite the size of the Iranian banks, Saudi Arabian banks were much more profitable as the three Saudi Arabian banks in the top 100 Islamic banks contributed 19 per cent of the ranking's total income," The Asian Banker said.

Al Rajhi Bank had the highest net income figure of US$1.74 billion (RM6 billion), the only bank to break the billion-dollar mark. This was also nearly three times more than the second most profitable Islamic bank, Kuwait Finance House (KFH).KFH's net income was five times that of the most profitable Iranian bank, Bank Tejarat.

The bank that jumped the greatest in rank was Dubai's Noor Islamic Bank, which climbed to 20th.CIMB Islamic Bank, meanwhile, jumped 19 places to 22nd position as it doubled its assets.Interestingly, The Asian Banker thinks that BMI may not be the largest bank in the list for much longer as its assets did not grow last year.

"This may be due to the European Union freezing the bank's assets, which has shrunk the bank's lead over Al Rajhi Bank to just 4 per cent from 40 per cent the previous year," it said.