Assets of listed banks in Arab stock markets reach $ 1.394 trillion

Updated 19 June 2012
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Assets of listed banks in Arab stock markets reach $ 1.394 trillion

Forbes Middle East has conducted an in-depth study into the largest banks in the Arab stock markets. This study included detailed research into 19 countries within the MENA region; 12 of which made it on to our final lists. Due to political instabilities or non-disclosure of annual financial reports for the full year ending Dec. 31, 2011, a number of countries were excluded from the rankings on this occasion. These countries include: Syria, Libya, Iraq, Mauritania, Yemen, Algeria, Sudan and Tunisia. As a result, out of a total of 110 banks, 75 were included in Forbes ranking of “The 75 Largest Banks in Arab Stock Markets,” with combined total assets reaching an impressive $1.394 trillion.
Assets were afforded the highest weighting amongst other criteria, as they provide the most accurate indication of bank size. With total assets of $82.995 billion, QNB secured the top spot on this ranking, followed by Al-Rajhi Bank with total assets of $58.940 billion. The 75 banks involved also recorded combined operational income of $60.6 billion and combined net profits of $22.7 billion, thanks in part to the creation of new credit portfolios (loans) totaling $855.7 billion. Our research concluded that Emirates NBD is the highest lending bank with total loans of $55.3 billion.
The GCC dominated this ranking with 57 banks, accounting for 76 percent of the total and representing combined total assets of $1.158 trillion. Furthermore, in the GCC alone, deposits which are regarded as the lifeblood of banks and the backbone of credit portfolios, reached $780.3 billion from a total of $979.7 billion.
Tracking banks' annual growth using key indicators such as growth in profits, revenues, loans and deposits throughout the year is vital to analyzing performance, both of individual banks and the sector as a whole. As part of this extensive study, and in light of increased profits achieved across the MENA region in 2011, the Forbes Middle East team conducted further research based on the disclosed annual financial reports of 75 banks for 2011 and 2010. This research resulted in second featured ranking: “The 75 Fastest Growing Banks in Arab Stock Markets”.
As one of the main indicators, profit growth was afforded the highest weighting amongst all the criteria used to develop the ranking. Profits are crucial in measuring the activity of a bank, as well as its ability to create a balance between assets and liabilities. They are also indicative of how well a bank is handling, and building upon, its shareholders' investments.
Alinma Bank tops the list of fastest growing banks with net profit growth of an incredible 2,737.7 percent, translating to a figure of $115 million up from just $4 million the year before. QNB followed in second place with net profits of $2.06 billion, representing growth of 31.6 percent.
Growth in deposits is one of the most important factors in increasing a bank's profits, followed by loan growth. As a result, the Forbes Middle East team paid close attention to both of these factors. While taking a modest position of 67th in the ranking of the fastest growing banks, Palestine's Arab Islamic Bank came out on top where deposit growth is concerned with an increase of 232.0 percent, followed by Alinma Bank which achieved deposit growth of 113.8 percent.
Again, the GCC proved its centrality to the MENA region's banking sector, with just two entries from Lebanon in twelfth and twentieth place disrupting the GCC's dominance of the top 20 spots. As for the top ten, Qatar boasts three banks, Oman and Saudi Arabia enter the list with two banks each, and Kuwait, UAE and Bahrain each claim one.
The global financial crisis has demonstrated the growing popularity of Islamic banking, which is increasingly regarded as more trustworthy and stable than its conventional banking counterparts. With figures to support this, a recent report by Ernst & Young expects MENA's Islamic banking industry to reach $990 billion by 2015. In light of its increasing significance, Forbes Middle East has created a sub-ranking of Islamic banking in the MENA region. Detailed research led by our-house team revealed total Islamic banking assets exceeding $293 billion across 18 banks.
Saudi Arabia led the way in 2011 entering with five banks boasting combined total assets of $123.4 billion. Presiding over the list is Al-Rajhi Bank with total assets of $58.940 billion followed by the Saudi British Bank with $36.991 billion. Joint second in terms of banks per country entering this ranking are Qatar, UAE and Bahrain recording three banks each.
The MENA region amassed a grand total of $979.7 billion in deposits for 2011 from across the 75 banks involved in this study. The GCC was the dominant player in this regard, contributing $780.3 billion which amounts to 80 percent of the total. Qatar's QNB topped the list, with deposits of $54.922 billion for the year. Emirates NBD came in second recording deposits of $52.629 billion, followed in third place by Al-Rajhi Bank with total deposits of $46.238 billion. Out of the twenty banks on the list, Saudi Arabia dominated in terms of number of entries, with a total of six banks.
Across the 75 banks analyzed as part of the Forbes Middle East study of the largest and fastest growing banks in Arab stock markets, total loans reached an impressive figure of $855.7 billion. Forbes’ ranking of the largest banks by loans was composed of 20 banks, with the UAE and Saudi Arabia entering the list with six each. Taking the number one spot was the UAE's Emirates NBD with loans reaching $55.304 billion, followed by Qatar's QNB with a total of $53.226 billion. Third spot was also taken by the UAE with the National Bank of Abu Dhabi recording loans of $43.423 billion.
A comprehensive investigation conducted by Forbes Middle East has broken down the geographical distribution of banks in the MENA region. Findings revealed that the UAE has a total of 16 banks throughout the region accounting for 21 percent of the total and securing it the top spot on this list. The UAE is followed by Saudi Arabia with eleven banks, representing 15 percent of the total. Rounding out the top three is Bahrain bringing nine banks to the table that make up 12 percent.
Kuwait has a total of eight banks taking 11 percent of the total, Jordan and Qatar each have seven banks constituting 9.5 percent each, and Oman presents six banks with 8 percent. Morocco and Lebanon each claim 5 percent of the total, both entering the list with four banks, followed by Egypt with two banks, capturing 2.5 percent of the geographical distribution. Finally, Palestine features in this geographical distribution list with a single bank.
Commenting on the study findings, Khuloud Al-Omian, editor-in-chief at Forbes Middle East, said: "Standing out from our rankings is the fact that both lists are dominated by banks from the GCC. In the largest banks ranking, the GCC enters the list with 57 banks with combined total assets of $1.158 trillion from a total of $1.394 trillion. Making its mark on our rankings is Qatar's QNB, securing the top spot amongst “The 75 Largest Banks in Arab Stock Markets” with impressive total assets of $82.995 billion. Meanwhile, in our ranking of the fastest growing banks, Alinma Bank tops the list with an almost unbelievable net profit growth of 2737 percent."


Power-sucking Bitcoin ‘mines’ spark backlash

Updated 58 min 27 sec ago
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Power-sucking Bitcoin ‘mines’ spark backlash

  • Local US authorities pushing back against bitcoin miners as power prices rise
  • Firms insist they bring revenue, investment and talent to mining locations

NEW YORK: Bitcoin “miners” who use rows of computers whirring at the same time to produce virtual currencies began taking root along New York’s northern border a couple of years ago to tap into some of the nation’s cheapest hydroelectric power, offering an air of Silicon Valley sophistication to this often-snowy region.
But as the once-high-flying bitcoin market has waned, so too has the enthusiasm for bitcoin miners. Mining operations with stacks of servers suck up so much electricity that they are in some cases causing power rates to spike for ordinary customers. And some officials question whether it’s all worth it for the relatively few jobs created.
“We don’t want someone coming in, taking our resources, not creating the jobs they professed to create and then disappear,” said Tim Currier, mayor of Massena, a village just south of the Canadian border, where bitcoin operator Coinmint recently announced plans to use the old aluminum plant site for a mining operation that would require 400 megawatts — roughly enough to power 300,000 homes at once.
In Plattsburgh, where two cryptocurrency operations have been blamed for spiking electricity rates, the prospect of more cryptocurrency miners plugging in spooked officials enough in March to enact an 18-month moratorium on new operations. The small border village of Rouses Point also is holding off on approving new server farms and Lake Placid is considering a moratorium.
For local officials, the power struggle has been a crash course in the esoteric bitcoin mining business in which miners earn bitcoins by making complex calculations that verify transactions on the digital currency’s public ledger.
Since it often uses hundreds of computers that throw off tremendous heat and burn a lot of power, it has tended to gravitate toward cooler places with cheap electricity, such as geothermal-rich Iceland or along the Columbia River region of Washington state.
The stretch of New York near the Canadian border similarly fits the bill. Cheap hydropower from a dam spanning the St. Lawrence River is doled out by a state authority to local businesses that promise to create jobs. Additionally, some municipalities such as Massena and Plattsburgh receive cheap electricity from a separate hydropower project near Niagara Falls.

 

In Plattsburgh, electricity is so cheap most residents use it instead of oil or wood to heat their homes. The couple of commercial cryptocurrency mines here can get an industrial rate of about 3 cents per kilowatt hour — less than half the national average.
But Plattsburgh Mayor Colin Read said its largest operator, Coinmint, which has two plants employing 20 or fewer people, can consume about 10 percent of Plattsburgh’s 104 megawatt cheap electricity quota. When the city exceeded its allocation like it did this winter, customers ended up paying $10 to $30 more a month for the extra electricity. For a major employer like Mold-Rite Plastics plant, it cost them at least $15,000 in February.
State regulators have since given municipal utilities the ability to charge higher rates to cryptocurrency miners. At least one bitcoin miner in Plattsburgh says he’s working with the city on solutions to the power worries.
Ryan Brienza, founder and CEO of the hosting company Zafra, said those could include mining on behalf of the city for an hour a day or harnessing the heat from mining computers to warm up large spaces.
While the direct number of jobs associated with mines can be small, Brienza said they can bring revenue, investments and talent to the city while employing local contractors.
“It can start snowballing,” Brienza said.
Coinmint’s plans for a new plant in Massena, for example, come with a promise of 150 jobs. That’s welcome in an area that in the past decade has suffered though the loss of aluminum-making jobs and the closure of a General Motors powertrain plant.
“J-O-Bs. Yup. What we need up here,” said Steve O’Shaughnessy, Massena town supervisor.
Coinmint had asked for a cheap power allocation from the New York Power Authority for Massena for part of its energy needs, but that request was deferred.
The power authority has separately enacted its own moratorium on allocating hydropower to cryptocurrency operations — mirroring municipalities that have effectively pushed the “pause” button on a rush of miners coming in.
Coinmint representatives said this month they hope to begin the Massena operation in the second part of this year. The company stressed that mines can be a good fit for this job-hungry area.
“They’re also going to get substantially more efficient over time,” said Coinmint spokesman Kyle Carlton. “So to the extent that Plattsburgh or Massena or anybody else can get in on that and establish themselves on the ground floor, I think that’s going to help those cities to be successful.”

Decoder

Bitcoin mining is the process used to verify transactions and add them to the currency's public ledger (blockchain). It involves compiling pending transactions and turning them into a computationally difficult, mathematical puzzle. The first computer to solve the puzzle claims a transaction fee and a newly-released bitcoin.