Qatar National Bank (QNB) with $229 billion of assets is the largest bank in the Middle East and Africa (MEA) zone according to S&P Global Market Intelligence. It is followed by First Abu Dhabi with $182 billion and then the top African bank, which is the Standard Bank of South Africa (Stanbic) with $164 billion of assets. Fourth and fifth are banks from Israel which S&P notes rose on the list due to the appreciation of the country’s Shekel currency versus the US dollar.
S&P MEA top bank origins
South Africa has the most African banks on the list with First Rand (ranked 8), Barclays Africa with $94 billion of assets and which is rebranding to Absa is ninth, while Nedbank and Investec are in 13th and 27th place respectively on the S&P list.
Other African banks are the National Bank of Egypt (14) and Attijariwafa of Morocco (23 ). QNB, which has been publishing quarterly results in Kenyan newspapers alongside other commercial banks, is also the second largest shareholder of Ecobank of Togo, but there are no Nigeria banks or any Sub-Saharan ones from the East or West blocks of the continent on the MEA list. Kenya’s largest bank group – KCB has about $6.5 billion of assets.
QNB and the banks on the MEA list are ranked according to IFRS accounting principles but certain banks use local accounting measures e.g Israeli GAAP, Eqyptian GAAP and Qatari GAAP.
The MEA banks are a sub-set of S&P’s list ranking the largest banks in the world. The list was topped by four banks from China, led by the Industrial & Commercial Bank of China with $4 trillion of assets, followed by China Construction Bank, Agricultural Bank of China and the Bank of China. There is more diversity after that with Mitsubishi UFJ of Japan in 5th place with $2.8 trillion of assets, followed by JPMorgan Chase (USA), the UK’s HSBC and in 8th place is BNP Paribas of France with $2.3 trillion of assets. Eighteen of the top 100 banks are from China, with $24 trillion of assets, the US had eleven banks and Japan has eight banks, but none from the MEA.
Yesterday Saudi Arabia, the United Arab Emirates, and Egypt led a handful of other countries including Bahrain, Yemen in severing diplomatic relations with Qatar – and these have now extended to some Qatar Bank sanctions.
- The three Gulf states gave Qatari visitors and residents two weeks to leave their countries.
- Saudi also closed the border and halted air and sea traffic with Qatar, urging “all brotherly countries and companies to do the same”
- Bahrain’s withdrew its diplomatic mission from the Qatari capital, Doha, within 48 hours
- The UAE ordered Qatari citizens to leave the country within 14 days and banned its citizens from traveling to Qatar.
- Egypt also announced the closure of its airspace and seaports for all Qatari transportation “to protect its national security”.
- UAE-based carriers Emirates, Etihad Airways, and FlyDubai said they would suspend flights to and from Qatar beginning Tuesday morning.
Qatar Airways which flies to over 150 destinations was barred from flying over UAE and Saudi Arabia. They have complied, which now leads to some interesting flight radar maps.
Continuing the onslaught which was apparently green-lit by US President Trump, financial sanctions were now announced today targeting Qatar banks and finance including:
- Banks in Saudi Arabia, UAE & Bahrain HAVE suspended transactions to banks in Qatar, citing instructions by central banks.
- Saudi Central Bank told banks not to trade in #Qatari Riyals in addition to foreign exchanges
- U.A.E. banks not providing leverage on Qatar bonds
- Qatari riyal under pressure as Saudi, UAE banks delayed Qatar deals.
- UAE and Bahraini central banks had asked banks they supervise to report their exposure to Qatari banks
- Some Sri Lankan banks stopped buying Qatari riyals, saying counterpart banks in Singapore had advised them not to accept the currency.
- Commercial banks say that they stopped accepting Qatar Riyal as they have no way of repatriating and clearing them
Older pre-sanction report
- Qatari banks have been borrowing abroad to fund their activities. Their foreign liabilities ballooned to 451 billion riyals ($124 billion) in March from 310 billion riyals at the end of 2015, central bank data shows.
- So any extended disruption to their ties with foreign banks could be awkward, though the government of the world’s biggest exporter has massive financial reserves which it could use to support them. Banks from the United Arab Emirates, Europe and elsewhere have been lending to Qatari institutions.
- Because of its financial reserves and as long as it can continue exporting liquefied natural gas, Qatar looks likely to avoid any crippling economic crisis. But credit rating agency Moody’s Investors Service said on Monday that if trade and capital flows were disrupted, the diplomatic dispute could eventually hurt the outlook for Qatar’s debt.
Following part I
Stanbic: Eight years after the merger between Stanbic and CFC banks, which created CFC Stanbic, Stanbic has rebranded and removed the “CFC” name completely from the bank. The 2008 merger created the number 4 bank in Kenya, and today it is about number 7 in assets with 25 branches and listed on the Nairobi shares exchange. The Stanbic brand will now be common in the 20 countries across Africa.
Bank M (of Tanzania) published a statement, denying they are the majority owners of the former Oriental Commercial Bank in Kenya – now known as M Oriental since June 2016. It states that MHL is a Kenyan entity that is promoted by some shareholders of Bank M, but that it does not have direct ownership.
QNB: Qatar National Bank continues to run quarterly newspaper ads on its size in Kenya without being linked to any Kenyan bank. Today’s newspaper which touts them as the largest financial institution in the Middle East and Africa region, with September 2016 assets of $196 billion (up 37%) and profits of $2.7 billion (up 11%).
This morning, the Governor of the Central Bank announced that Chase Bank would soon reopen. This will be facilitated by KCB, and comes a day after unconfirmed reports that QNB of Qatar was poised to win the race to take over Chase.
KCB’s credentials as a strong bank with a solid brand, adequate human resources, and wide experience in the country, will facilitate safeguarding the interests of CBL’s depositors and creditors, and the wider public interest. CBK will continue to monitor closely developments in CBL. Accordingly: All Chase Bank Ltd (In Receivership) branches will open by Wednesday, April 27, 2016. The online and mobile banking services will also become available. However, branches may initially offer limited banking services.
The local newspapers have an ad by QNB Group (QNB – Qatar National Bank ). QNB is not in Kenya officially, but they are the largest investor at Ecobank (with 23.5%) who have a mid-size presence in Kenya (about No 20) – one of the 36 countries across the continent that Ecobank is present in.
A newspaper opinion piece last year linked QNB with a bid to buy government shares in one of Kenya’s state-owned local banks – one with a regional presence in East Africa. QNB Capital was also the joint lead manager for Kenya’s 2013 Eurobond with plans to arrange a Sukuk (sovereign bond) for Kenya after the Eurobond.
A Bloomberg piece notes that the Qatar bank is pushing into Africa as competition in its home market of 2 million people curbs profitability..with the possibility that QNB will go for the entire (Ecobank).