Strongest Islamic banks 2023

In this year’s Strongest Islamic Banks By Balance Sheet evaluation, Al Rajhi Bank maintained its standing as the world’s strongest Islamic bank in the world. The evaluation is conducted using a comprehensive and transparent scorecard, assessing the banks in six areas of balance sheet financial performance, namely the ability to scale, balance sheet growth, risk profile, profitability, asset quality, and liquidity, encompassing 14 specific factors.

The Middle Eastern Islamic banks exhibited greater scale and profitability compared to their Asian counterparts, while Asian Islamic banks showed stronger asset quality. Islamic banks in Saudi Arabia and Kuwait have shown the highest overall strength, with impressive capitalisation, liquidity, and profitability metrics. Saudi banks, for example, boast an average Tier 1 capital ratio of 19% and a capital adequacy ratio of 21%. Kuwaiti banks, on the other hand, excel in liquidity, with a weighted liquidity coverage ratio of 181% compared to Saudi banks’ 134%. In Asia, Islamic banks in Pakistan exhibited the highest financial strength, propelled by exceptional performance in balance sheet growth, profitability, and liquidity.

World's strongest Islamic banks in 2022

The Asian Banker has been publishing the world’s first authoritative annual ranking of the Strongest Banks in Asia Pacific since 2007 based on balance sheet strength. It uses a detailed and transparent scorecard to evaluate the ranking which entails six areas of balance sheet financial performance: the ability to scale, balance sheet growth, risk profile, profitability, asset quality and liquidity. The ranking has since been expanded to include banks in the Middle East, Africa, and Central Asia as well as Islamic banks globally.

In this year’s The Asian Banker Strongest Islamic Banks By Balance Sheet evaluation, Al Rajhi Bank retained the strongest Islamic bank ranking in the world. This is based on a detailed and transparent scorecard that evaluates Islamic banks on six areas of balance sheet financial performance, namely the ability to scale, balance sheet growth, risk profile, profitability, asset quality, and liquidity. Al Rajhi Bank excelled in all areas excluding liquidity.

Saudi Arabian and Turkish Islamic banks attained the highest average strength scores. Islamic banks in both countries registered strong balance sheet growth and remained well capitalised. Saudi Arabian Islamic banks demonstrated good asset quality and profitability, while Turkish Islamic banks recorded stronger liquidity. The strength score of the Asian Islamic banks averaged 2.8 out of five, lower than the average for all the 100 Islamic banks, at 2.99. Overall, these banks performed well in asset quality and capitalisation. Bank Mega Syariah, Maybank Islamic and Meezan Bank are the top three strongest Islamic banks in Asia. All these three maintained strong capital positions and reported asset quality improvement.

World's strongest Islamic banks in 2021

The Asian Banker has been publishing the world’s first authoritative annual ranking of the Strongest Banks in Asia Pacific since 2007 based on balance sheet strength. It uses a detailed and transparent scorecard to evaluate the ranking which entails six areas of balance sheet financial performance: the ability to scale, balance sheet growth, risk profile, profitability, asset quality and liquidity. The ranking has since been expanded to include banks in the Middle East, Africa, and Central Asia as well as Islamic banks globally.

In this year’s The Asian Banker Strongest Islamic Banks By Balance Sheet evaluation, Al Rajhi Bank remained on top of the ranking of the strongest Islamic banks. This is based on a detailed and transparent scorecard that evaluates Islamic banks on six areas of balance sheet financial performance, namely the ability to scale, balance sheet growth, risk profile, profitability, asset quality and liquidity. The top ten strongest Islamic banks comprise three Saudi Arabian banks, three Qatari banks, two Turkish banks and one each from Kuwait and Pakistan. Meezan Bank, Bank Islam Malaysia and Maybank Islamic are the top three strongest Islamic banks in Asia.

Saudi Arabian and Qatari Islamic banks attained the highest average strength score. The average return on asset of Saudi Arabian and Qatari Islamic banks reached 1.91% and 1.52% respectively, compared with the global average of 1.05%. Saudi Arabian Islamic banks remained well capitalised, maintaining a 19.5% average capital adequacy ratio, while the average gross non-performing loan ratio and loan loss reserves to gross non-performing loans ratio stood at 1.3% and 251% respectively.