Bahrain
Kuwait
Oman
Qatar
Saudi Arabia
UAE
|
|
| ||||
|
||||
Samba Financial Group is one of the Saudi banking sector’s biggest players. It is the Kingdom’s second largest bank by total assets, with a market share of about fourteen percent, and the fourth largest by capital.
And that scale is unlikely to change anytime soon. In August ratings agency Capital Intelligence (CI) affirmed Samba’s ratings, leaving it with a long-term foreign currency rating of ‘AA-’, the short-term foreign currency rating of ‘A1’ and the financial strength rating of ‘AA-’. Samba’s support rating is ‘2’, while all ratings carry a Stable Outlook.
The agency noted that liquidity by all major ratios is very sound, partly a consequence of Samba’s historical ability to generate time deposits and to do so with minimal effect on its cost of funds. And the bank's special commission differential is very similar to that of the peer group; that, coupled with continued cost control, allowed the bank to be one of the few in the Kingdom to post an increased net profit for 2008.
CI said that Samba’s balance sheet displays strength in all areas, and in general has weathered the current economic crisis very well. Even by CI’s conservative measurement of non-performing loans (NPLs), the bank’s asset quality remained sound and NPLs were more than completely covered by loan-loss reserves.
Like most banks in Saudi Arabia and elsewhere in the Gulf, Samba is facing write-offs, or at least workouts, relative to several large family-owned corporations. While full resolution of that issue may still be some time away, CI said that Samba is well equipped to deal with these possibilities, because of its strong capital position and its robust earnings profile.
And that scale is unlikely to change anytime soon. In August ratings agency Capital Intelligence (CI) affirmed Samba’s ratings, leaving it with a long-term foreign currency rating of ‘AA-’, the short-term foreign currency rating of ‘A1’ and the financial strength rating of ‘AA-’. Samba’s support rating is ‘2’, while all ratings carry a Stable Outlook.
The agency noted that liquidity by all major ratios is very sound, partly a consequence of Samba’s historical ability to generate time deposits and to do so with minimal effect on its cost of funds. And the bank's special commission differential is very similar to that of the peer group; that, coupled with continued cost control, allowed the bank to be one of the few in the Kingdom to post an increased net profit for 2008.
CI said that Samba’s balance sheet displays strength in all areas, and in general has weathered the current economic crisis very well. Even by CI’s conservative measurement of non-performing loans (NPLs), the bank’s asset quality remained sound and NPLs were more than completely covered by loan-loss reserves.
Like most banks in Saudi Arabia and elsewhere in the Gulf, Samba is facing write-offs, or at least workouts, relative to several large family-owned corporations. While full resolution of that issue may still be some time away, CI said that Samba is well equipped to deal with these possibilities, because of its strong capital position and its robust earnings profile.
Pipe dreams
Posted by TALAL on 20 December 2009 at 18:19 UAE time
With all due respect the list in not only wrong but misleading as well. I agree with Paddy that you need to come up with more meaningful criteria for ranking Banks as this doesn't work at all. When new financial results are out next year at least 3 on the list may end up up the creek without a paddle.
Posted by TALAL on 20 December 2009 at 18:19 UAE time
With all due respect the list in not only wrong but misleading as well. I agree with Paddy that you need to come up with more meaningful criteria for ranking Banks as this doesn't work at all. When new financial results are out next year at least 3 on the list may end up up the creek without a paddle.
Agree with the list
Posted by SG, Kuwait, Kuwait on 9 December 2009 at 09:50 UAE time
I have been working in the corporate banking field for over 5 years now and the banks listed above are quite secure. Choosing randomly and checking the historic audited financials you will see that these banks have been taking adequate provisions over the years unlike banks like Commercial Bank of Kuwait that took extreme sudden provisions making them reporting losses in 3Q of 09 whereas KD100m for the same period the previous year; that goes to show the type of credit they run. As for all the questions Paddy is asking, well an article that answers all those questions might as well be a book cos you are asking for financial analyses of each bank which could easily need 100 pages or so (4 pages each minimum). This report is a morale booster but is based on financials issued by the best international auditors. and, by the way, i do not work in any of those top banks but i intend to.
Posted by SG, Kuwait, Kuwait on 9 December 2009 at 09:50 UAE time
I have been working in the corporate banking field for over 5 years now and the banks listed above are quite secure. Choosing randomly and checking the historic audited financials you will see that these banks have been taking adequate provisions over the years unlike banks like Commercial Bank of Kuwait that took extreme sudden provisions making them reporting losses in 3Q of 09 whereas KD100m for the same period the previous year; that goes to show the type of credit they run. As for all the questions Paddy is asking, well an article that answers all those questions might as well be a book cos you are asking for financial analyses of each bank which could easily need 100 pages or so (4 pages each minimum). This report is a morale booster but is based on financials issued by the best international auditors. and, by the way, i do not work in any of those top banks but i intend to.
Tangible evidence missing
Posted by Paddy, Dubai, UAE on 26 November 2009 at 00:04 UAE time
The report talks about the performance of each bank at a very high level without delving deep into the numbers. For example, what is the net NPL for each bank in comparison with their assets? What is the exposure ratio (total exposure to the risky sectors out of the total assets) of each bank to risky sectors like Credit Cards, Construction & Real Estate etc? What is the recovery position with respect to Credit Card advances? What is the exposure of each bank (especially UAE and Saudi banks) to the Saad and Algosaibi groups? Have they kept aside provisions against these troubled assets? What has each bank done differently to tide over the financial crisis? HAs there been any fresh capital infusion into any of these banks? What is the Capital Adequacy Ratio of these banks? The lack of transparency with regard to reporting in the Middle East financial sector means that the banks may not have fully reported their bad assets. Maybe the report is intended to be a morale booster to the general public and not exactly based on hard facts.
Posted by Paddy, Dubai, UAE on 26 November 2009 at 00:04 UAE time
The report talks about the performance of each bank at a very high level without delving deep into the numbers. For example, what is the net NPL for each bank in comparison with their assets? What is the exposure ratio (total exposure to the risky sectors out of the total assets) of each bank to risky sectors like Credit Cards, Construction & Real Estate etc? What is the recovery position with respect to Credit Card advances? What is the exposure of each bank (especially UAE and Saudi banks) to the Saad and Algosaibi groups? Have they kept aside provisions against these troubled assets? What has each bank done differently to tide over the financial crisis? HAs there been any fresh capital infusion into any of these banks? What is the Capital Adequacy Ratio of these banks? The lack of transparency with regard to reporting in the Middle East financial sector means that the banks may not have fully reported their bad assets. Maybe the report is intended to be a morale booster to the general public and not exactly based on hard facts.
Mobile
