World’s Safest Banks 2016: Safest Islamic Banks

Al Hilal Bank takes Islamic crown as Saudi sovereign rating slides.

Abu Dhabi’s Al Hilal Bank is the safest Islamic bank in the six GCC states, replacing Al Rajhi Bank of Saudi Arabia, which falls to seventh position following downgrades prompted by the downgrading of the Saudi government. Kuwait Finance House moves up to second position, and Abu Dhabi Islamic Bank moves up to third.


Global Finance’s ranking of Islamic banks in the GCC includes all banks that conduct only shariah-compliant business. In line with the methodology used in the other rankings, banks that are 100% subsidiaries of other banks are not eligible for inclusion.

There are 26 such banks in the GCC. Three are rated by all three of the major credit rating agencies, and 10 have ratings from two. (The three triple-rated are Kuwait Finance House, Al Rajhi Bank and Sharjah Islamic Bank.) Warba Bank, of Kuwait, was rated by Moody’s in late 2015 and by Fitch in mid-2016, taking the number of banks with two or more ratings to 13, compared with 12 last year. Seven banks have a rating from one of the three agencies, the same number as last year, and six are unrated, one fewer than last year.

The banks’ ratings reflect (but are not always precisely determined by) ratings on the countries in which they are based. As a result, banks in Kuwait, Qatar, Saudi Arabia and the UAE tend to enjoy high ratings, whereas banks in Bahrain do not. There are only two Islamic banks in Oman (excluding those that are wholly-owned subsidiaries of conventional banks). Both are small and neither is rated.

None of the Islamic banks score high enough to be included in our Global ranking, although eight are included in the Emerging Markets list. None are included in the Safest Commercial Banks list. Al Hilal Bank’s ratings are the same as those at the lower end of the Commercial Banks ranking, although its asset size is smaller than those with 17 points that are included; more important, as a bank owned by state-owned Abu Dhabi Investment Council, it is ineligible for that list.

THE Safest Islamic Banks

Banks with two or more ratings

Rank

Group Name

Country

Ratings

Total Score

Assets

$ mn

Statement

Date

Fitch

Moody’s

S&P

1

Al Hilal Bank

UAE

A+

A1

N/R

17

11,734

12/31/15

2

Kuwait Finance House

Kuwait

A+

A1

A-

16

54,454

12/31/15

3

Abu Dhabi Islamic Bank

UAE

A+

A2

N/R

15.5

32,234

12/31/15

4

Ahli United Bank (Kuwait)

Kuwait

A+

A2

N/R

15.5

12,864

12/31/15

5

Barwa Bank

Qatar

A+

A2

N/R

15.5

12,418

12/31/15

6

Qatar International Islamic Bank

Qatar

A+

A2

N/R

15.5

11,137

12/31/15

7

Al Rajhi Bank

Saudi Arabia

A

A1

BBB+

14

84,165

12/31/15

8

Qatar Islamic Bank

Qatar

A+

N/R

A-

14

34,898

12/31/15

9

Boubyan Bank

Kuwait

A+

Baa1

N/R

12.5

10,323

12/31/15

10

Dubai Islamic Bank

UAE

A

Baa1

N/R

11

40,816

12/31/15

11

Sharjah Islamic Bank

UAE

BBB+

A3

BBB+

11

8,137

12/31/15

12

Warba Bank

Kuwait

A+

Baa2

N/R

11

2,558

31/12/15

13

Bank AlJazira

Saudi Arabia

A-

Baa1

N/R

9.5

16,870

12/31/15

Banks with one rating

Rank

Group Name

Country

Ratings

Total Score

Assets

$ mn

Statement

Date

Fitch

Moody’s

S&P

1

Kuwait International Bank

Kuwait

A+

N/A

5,898

12/31/15

2

Masraf Al Rayan

Qatar

A2

N/A

22,795

12/31/15

3

Alinma Bank

Saudi Arabia

A-

N/A

23,660

12/31/15

4

Bank Albilad

Saudi Arabia

A3

N/A

13,645

12/31/15

5

Noor Bank

UAE

A-

N/A

10,746

12/31/15

6

Al Baraka Islamic Bank

Bahrain

BB+

N/A

24,618

12/31/15

7

Bahrain Islamic Bank

Bahrain

Ba3

N/A

2,408

9/30/15

Asset figures for banks with two ratings or one rating are provided by Fitch Solutions (even if they are not rated by Fitch).

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