With 32 percent growth in revenue during the financial year 2001, the Kuwaiti-based Burgan Bank has gained the leading position among the top 25 banks in the Gulf Cooperation Council (GCC) and Levant region in terms of revenue growth and diversification, according to a soon to be published report by Gulf Banking Consultants (GBC), UK-ncorporated management consulting firm.
Gulf Bank achieves second place with 22 percent growth, closely followed by Al-Bank Al-Saudi Al-Fransi on third position with 20 percent year-on-year growth in revenue. Saudi Hollandi Bank and Al-Ahli United Bank (AUB) gained fourth and fifth position with 14 percent and 13 percent revenue growth rates respectively. In contrast, the revenue of Gulf International Bank, Al-Rajhi Banking and Investment Corporation (Al-Rajhi) and Emirates Bank Group declined during the year.
The report highlights the extent to which the GCC banks have reduced their reliance on Net Interest Income (NII) by developing other sources of revenue including, fees, commission, capital gain and trading related revenue.
Burgan Bank tops the list by producing 47 percent of its revenue from sources other than NII. Ahli United Bank (AUB) and MashreqBank both generated 44 percent of their revenue from sources other than NII. The Top 25 average was set at a 29 percent ratio. Meanwhile, Al-Rajhi, Arab National Bank (ANB) and Qatar National Bank (QNB) posted the lowest ratio with 16 percent, 17 percent and 17 percent respectively.
The analysis indicates that banks from Saudi Arabia and Qatar have generally not developed their non-NII sources of revenue to the extent achieved by banks in Kuwait, Bahrain and the United Arab Emirates (UAE). Saudi and Qatari banks posted a non-NII revenue ratio in the range of 16 percent to 25 percent.
The revenue mix of international banks still remains significantly more diversified than their counterparts in the GCC region. Compared to the GCC average of 29 percent revenue from sources other than NII, the Top 10 international average is 54 percent.
The GCC average of 29 percent has a wide variation among the Top 25 players. The top GCC performers produced 40 percent to 45 percent from non-NII sources of revenue while some other GCC banks had a much lower ratio in the range of 15 percent to 20 percent. In comparison, the variation among international retail banks was relatively insignificant irrespective of their geographical location. Citigroup and Bank of America in the USA, ABN AMRO in Netherlands, HSBC and Barclays in the UK, all had a non-NII revenue ratio in a tight range of 42 percent to 48 percent. — (menareport.com)
© 2002 Mena Report (www.menareport.com )