Sunday, 25 October 2015

WIBC Leaderboard 2015: Qatari Islamic Banks Most Efficient in Global Islamic Finance Industry

WIBC Leaderboard 2015: Qatari Islamic Banks Most Efficient in Global Islamic Finance Industry

Masraf Al Rayan and Qatar International Islamic Bank lead Cost-to-Income Ratio rankings in the GCC
Manama, Bahrain, 25 October 2015: The WIBC Leaderboard announced today the global rankings of Islamic banks in terms of Cost-to-Income ratio, one of the financial performance sub-indicators of the Leaderboard. No less than three Qatar-based banks have appeared in the top 5 Islamic banks in the GCC based on the Cost-to-Income ratio rankings. As per the rankings, Masraf Al Rayan and Qatar International Islamic Bank, both based in Qatar are positioned at the top of Islamic financial institutions in the GCC with a ratio of 20.6% and 24.4% respectively.
The WIBC Leaderboard is an innovative performance assessment framework designed by, Middle East Global Advisors, the conveners of the much-acclaimed World Islamic Banking Conference (WIBC), as part of its efforts to improve the quality and performance of the Islamic banking industry.
The Cost-to-Income ratio is a key financial measure used to gauge the efficiency of a bank. It is calculated based on non-interest operating cost divided by the sum of net interest income and non-interest operating income. The ratio gives a clear view of how efficiently a bank is operating at and what portion of costs can be covered by income.
In short, the lower the ratio, the higher the ranking of the bank. The Chart below shows the global rankings of banks along with their scores.
Top 5 Islamic Banks in the GCC according to the Cost-to-Income Ratio
Name of Financial Institution Country Cost-to-Income Ratio (%)
Masraf Al Rayan Qatar 20.60
Qatar International Islamic Bank Qatar 24.47
Qatar Islamic Bank Qatar 31.78
Al Rajhi Bank Saudi Arabia 33.12
Ahli United Bank Kuwait 33.20
Source: Bankscope and ICD Thomson Reuters Islamic Finance Development Indicator
Speaking about the importance of this indicator, Dr Sayd Farook, Vice Chairman and CEO of Middle East Global Advisors, stated:
“By virtue of its business model, Islamic banks are able to keep their costs low as they do not participate in volatile market based activities. However, this decreases Islamic banks’ income generating avenues. In light of such issues, Cost-to-Income ratio helps banks in keeping track of their financial performance by readjusting costs and focus on revenue generating streams in case they fall below the industry benchmark.”
Cost-to-Income ratio is an important indicator for bank managers regarding the financial strength of their banks. It has never been more important than now for banks to achieve operational excellence given the range of headwinds they face, ranging from the challenge of regulatory requirements to the imperative of managing volatility in global financial markets.
WIBC 2015 will take place on the 1st, 2nd and 3rd of December at the Gulf Hotel in Manama, Kingdom of Bahrain. For more information, visit

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