Al Rajhi Banking & Investment Corp. broke into the top five largest banks in the Middle East and Africa region after almost doubling assets over the past three years.
The Saudi Arabian bank jumped five places to fourth in S&P Global Market Intelligence's annual ranking, the highest climb of any lender in the past year. Al Rajhi's assets totaled $202.86 billion at Dec. 31, 2022.
The bank's assets increased 22% in 2022 as mortgage financing grew 29.8%, the lender said in its fourth-quarter 2022 earnings statement.
Fellow Saudi banks Saudi British Bank, Banque Saudi Fransi and Arab National Bank also climbed in the ranking, while Saudi National Bank and Riyad Bank retained their respective third and 19th spots. Saudi banks are expected to extend more loans linked to mega-projects in 2023, although overall loan demand is set to decline.
Qatar National Bank (QPSC) remained the largest bank by assets in the region with $323.56 billion, and United Arab Emirates-based First Abu Dhabi Bank PJSC remained in second place with $302.22 billion.
For the latest ranking, company assets were adjusted on a best-efforts basis for pending mergers, acquisitions and divestures, as well as the M&A deals that closed after the end of the period through March 31. Assets reported by non-US dollar filers were converted to dollars using period-end exchange rates. Total assets were taken on an "as-reported" basis, and no adjustments were made to account for differing accounting standards. The majority of the banks were ranked by total assets as of Dec. 31, 2022. In the previous ranking published April 26, 2022, most company assets were as of Dec. 31, 2021, and were adjusted for pending and completed M&A as of March 31, 2022.
All Israeli banks fell in the ranking. Bank Hapoalim BM dropped the most among the five lenders on the list, slipping four places to eighth from fourth. Bank Leumi le-Israel BM, Mizrahi Tefahot Bank Ltd., Israel Discount Bank Ltd. and F.I.B.I. Holdings Ltd. also dropped in the ranking.
Israeli banks' high exposure to construction and other real estate activities is a key risk, but their underlying profitability remains solid amid rising interest rates, S&P Global Ratings wrote in a February report. Israel's economy is expected to perform better than global peers, Ratings said.
Three banks entered the ranking: Iran-based Bank Pasargad (PLC) ranked 20th, United Arab Emirates-based Mashreqbank PSC ranked 29th and Saudi Arabia-based Alinma Bank ranked 30th.