Who would have thought at the start of 2020 that we would experience such a rollercoaster of a year? The past 12 months have thrown up both challenges and surprises — but in the midst of coronavirus chaos, Islamic banks once again rose to the occasion and the year has been one of positive progress as well as difficult decisions. As we enter a new and hopefully more positive year, we look to celebrate the best and brightest of these banks, and applaud their achievements. The IFN Best Banks Poll 2020 is our biggest and broadest yet, spanning 44 categories and 35 countries, and we are delighted to bring you the crème de la crème of the Islamic finance industry, as voted for by you.
Acting as a unique barometer for banking performance, the IFN Best Banks Poll is now in its 16th year, and represents one of the most prestigious accolades in the Islamic finance industry. To qualify for the Best Banks Poll, a market must have at least three operational Islamic banks. And in a year that has seen some of the most challenging circumstances for financial institutions — from the oil price crash to the economic collapse of COVID-19 — this recognition is well-deserved. Islamic banks distinguished themselves in 2020 by their consistency and care for their customers. The vast majority halted payments, offered crisis support, ceased charges and created as supportive an environment as possible for their clients, for which the industry as a whole deserve applause and praise.
But 2020 was not just about the coronavirus — it was about surging Shariah compliant stock indices, a booming fintech sector, government stimulus, a rapidly recovering Sukuk market, a growing Halal economy, an explosion of environmental, social and governance and green finance, and much more.
So who were the top players, and who came out head and shoulders above the rest? With over 26,000 votes counted, this year was the biggest ever. So without further ado, let us reveal the winners…
Governing bodies and state supervisors play a fundamental role in supporting, guiding, directing and leading the industry — both in well established markets and new entrants. And in these unprecedented times, their leadership became more important than ever, and their support and stimulus packages vital in helping banks and their customers to weather the worst of the storm.
It is always a closely contested battle for the top spot, but 2020 was rather more of a runaway victory than we have seen in recent years. The 2018 winner, the State Bank of Pakistan, achieved a decisive win with almost three quarters of the votes — perhaps due to its strenuous support of Islamic finance over the past year, including the issuance in July 2020 of revised instructions for banks to expand the scope of their Shariah compliant banking to 25% of the country’s assets and deposits by 2023.
Pakistani banks had a good year this year, with Meezan Bank also walking away with the award for Most Innovative Islamic Bank (won last year by Emirates Islamic), while BankIslami Pakistan came second and Abu Dhabi Islamic Bank came in third. Meezan has had a strong run in 2020, with numerous exciting partnerships to boost its Islamic capabilities: including a partnership with VavaCars back in February to provide Shariah compliant financing for car trading. It also launched a brand-new digital transformation agenda through its partnership with BPC Banking Technologies, including an entire payment systems upgrade — a wise move, given the rapid take-up of digital channels due to the COVID-19 crisis.
The hard work paid off — not only did Meezan Bank win Most Innovative Islamic Bank overall, but it also took home the crown for Best Islamic Bank in Pakistan, with over 50% of the vote. BankIslami Pakistan once again came second, while Dubai Islamic Bank Pakistan came third.
Although the majority of categories were, impressively, won by local and regional players this year, when it comes to custody it’s the big boys who dominate the scene. HSBC once again took the prize for Best Islamic Trustee/Custodian, with over two-thirds of the vote, while Citibank and Bank of New York Mellon came in close as runners-up.
Across the board, however, UAE-based banks also dominated, with some of the region’s fastest-growing players putting in a sterling performance. The award for Best Islamic Retail Bank was one of the most hotly contested of the year, with Dubai Islamic Bank (DIB) eventually walking away with the prize. Meezan Bank once again came second, while CIMB Islamic took third place for the second year in a row. DIB’s win was well-deserved: the bank demonstrated consistent performance over the year, rewarded in December when Fitch Ratings reaffirmed its ‘A’ rating and stable outlook, citing its systemic importance to the UAE’s banking system and its 9% share of total UAE banking assets following its seminal merger with Noor Bank at the start of the year.
It was not just DIB that offered an outstanding performance this year though. Its neighbor, Abu Dhabi Islamic Bank (ADIB), also shone: winning both Best Islamic Private Bank (with Meezan Bank coming second and Oman’s Bank Muscat third) and Best Islamic Bank for Treasury Management (followed by 2019 winner CIMB Islamic, with DIB taking third place) and to complete the hattrick, also narrowly edging ahead to snatch the crown for Best Islamic Bank in the UAE (with DIB coming second in an incredibly close contest with just 20 votes in it, while ADCB Islamic Banking took third place). ADIB made particular strides in 2020 with its digital offering, reporting record levels of digital adoption across its retail and corporate banking services in the first half of the year, with 99% of retail financial transactions conducted digitally, while over 60% of ADIB’s business customers used ADIB Direct, its automated trade finance platform.
Looking outward across the rest of the GCC, the award for Best Islamic Bank in Bahrain was yet again won by 2019 victor Bahrain Islamic Bank, while new entrants AlBaraka Islamic Bank Bahrain and National Bank of Bahrain took second and third place respectively.
In Kuwait, National Bank of Kuwait once again won the day, with Ahli United Bank Kuwait and Al Rajhi Bank Kuwait chasing hard on its heels in one of the most closely fought battles of the contest. Notably however, none of the 2019 winners (Kuwait Finance House, Boubyan Bank and Warba Bank) made an appearance this year.
In Oman, we saw 2019 runner-up Bank Nizwa pip last year’s winner Bank Muscat (Meethaq Islamic Banking) to the post, while National Bank of Oman (Muzn Islamic Banking) took third. Interestingly, we saw nothing from Oman Arab Bank since its takeover of Alizz Islamic Bank — perhaps because the two institutions are busy with the process of merging.
In Qatar, which recently mended its bridges with the rest of the GCC, 2019’s winner Qatar Islamic Bank won 47% of the vote to retain its crown, while 2019 runner-up QIIB again came second and Qatar National Bank came third.
And finally, in Saudi Arabia, the giant Al Rajhi Group took the top spot yet again, while Samba Financial Group (which is set to merge with National Commercial Bank (NCB) to create a behemoth with over US$223 billion in banking assets) took second place and its dance partner, NCB, ironically came third.
Malaysian banks, which dominated the categories in 2019, clearly had more competition this year — but that does not mean they were not both active and appreciated. CIMB Investment Bank took home the prize for Best Islamic Investment Bank, dominating the category with an impressive 81% of the vote. Citi Islamic Investment Bank came second, while Maybank Investment Bank came third.
CIMB Islamic also won out in the fiercely fought country crown, winning the award for Best Islamic Bank in Malaysia for the fifth year in a row, while Bank Islam Malaysia came second and Maybank Islamic took third.
The fifth-largest banking group in ASEAN with over 15 million customers across the region, CIMB Group is a behemoth in the banking world — and its Islamic offering has gone from strength to strength under the guidance of Ahmad Shahriman Mohd Shariff, CEO of CIMB Islamic. Throughout 2020, the bank has been instrumental in supporting the most needful elements of society, including retail and SME customers, through payment moratoriums, relief packages and more. In early 2020, the bank also launched the innovative new ‘Halal Biz Ready’ program, a micro-SME platform designed to connect businesses to global Halal trade and finance the certification of more Halal SMEs through up to RM100 million (US$24.7 million) in financing opportunities. This year the bank also launched Renewable Energy Financing for SMEs, as part of its focus on sustainability, as well as further developing its Halal Corridor strategy to enable Malaysian businesses to connect to the global Halal economy.
Breaking new ground
The award for Best New Islamic Bank is always an interesting category. Introduced for the first time in 2018 to recognize the bank that has most successfully achieved a new market entry, 2019’s award was won by Iraq’s Al Taif Islamic Investment & Finance Bank. In 2020 however, a new entrant came to light: United Commercial Bank (UCB Taqwa) of Bangladesh, followed by Mercantile Bank (Mercantile Bank Islamic Banking), also from Bangladesh, which launched its Shariah offering in July 2020 and by December already had 15 Islamic windows across the country. Third place went to Midland Bank Salaam.
From the global to the local, our country categories exist to showcase the headline act of every significant Islamic finance jurisdiction — the bank that has played the biggest part in driving forward the industry. In some, this might be the dominating player while in others it could be the agile new entrant — the poll does not distinguish by size, but by influence.
Africa was an exceptionally active market in 2020, and the continent saw a surge of Islamic interest, including a truly exceptional performance of its Islamic equity indices, along with a plethora of new institutions entering the market. Long-standing leader Nigeria saw its Best Bank Award for 2020 go to Taj Bank (with Jaiz Bank and Fidelity as runners-up), while in Kenya the prize was once again taken by 2019 winner Dubai Islamic Bank Kenya (followed by National Bank of Kenya and Standard Chartered Kenya).
Up north, in Libya we saw National Commercial Bank take the crown (Al Waha Bank came second and First Gulf Libyan Bank third), while in Egypt Abu Dhabi Islamic Bank (Egypt) again won the day, followed by Faisal Bank and National Bank of Egypt.
In Morocco, new entrant Al Akhdar Bank took home the award, and in Tunisia AlBaraka Tunisia came up trumps. In Sudan, Faisal Islamic Bank won Best Islamic Bank for the first time, and in South Africa, 2019 winner AlBaraka Bank South Africa held onto its crown.
In Somalia, the battle was very close but Salaam Somali Bank won out over runner-up Dara-Salaam Bank by just a handful of votes. In Tanzania, Amana Bank (Tanzania) won the prize.
Malaysia might be the pioneer for Islamic finance in Asia but multiple other jurisdictions are making a strong name for themselves — not least Indonesia, the most populous Muslim country in the world, which has gone from strength to strength particularly within the fields of green finance and sovereign Sukuk. In its banking sector, the country finally this year topped the seminal 5% barrier for Islamic assets, and its upcoming tri-state bank merger is set to make even bigger waves in the business. For 2020, we saw Bank Muamalat win Best Islamic Bank in Indonesia, although the category was extremely close, with Maybank Indonesia coming close behind and Panin Dubai Syariah Bank in third. Sri Lanka saw MCB Bank take top spot, while for 2020 the award for Best Japanese Bank Offering Islamic Financial Services went once again to MUFG Bank, formerly Bank of Tokyo Mitsubishi UFJ (the 2017 winner), Japan’s largest bank and the eighth-largest in the world. Mizuho Bank and Sumitomo Mitsui Banking Corporation came runners-up.
Middle Eastern might
Moving back to the Middle East and it should be remembered that there are plenty of active markets outside the core Gulf region that are making strides in the field of Islamic finance — often under deeply challenging political, social or economic conditions. In Yemen, the Best Islamic Bank Award was won by Saba Islamic Bank. In Lebanon, AlBaraka Bank Lebanon won the day and in Jordan, Jordan Islamic Bank once again walked away with the prize. Abu Dhabi Islamic Bank (Iraq) took top spot in Iraq for 2020, while Ansar Bank dominated in Iran. Arab Islamic Bank won in Palestine, and AlBaraka Bank Syria in Syria.
Looking east, and Central Asia is becoming an increasingly active and influential hub for Islamic finance as it strives to grow its domestic industries. The Best Islamic Bank in the Commonwealth of Independent States for 2020 was awarded to Al Hilal Bank (Kazakhstan), followed by Eco-Islamic Bank of Kyrgyzstan in second place and AK Bars Bank (Russia) in third, while the Islamic Bank of Afghanistan took the top spot from Afghan United Bank in a coup that won 75% of the vote.
Heading west, and in Turkey last year’s winner AlBaraka Turk once again took the top spot with a whopping 65% of the vote, while Turkiye Finans and Kuveyt Turk were runners-up. And finally, in the UK, 2019’s third runner-up Gatehouse Bank took the top spot this year while Al Rayan Bank came second and 2019 winner Bank of London and The Middle East came third, in one of the closet competitions of the season.
The big announcement
But of course, there can only be one overall winner. Only one can win the ultimate glory, only one bank can claim that coveted crown. And in such an unprecedented and unexpected year, to win under such challenging conditions would be a victory indeed.
With a prestigious and highly competitive shortlist comprising five of the industry’s leading players, we are delighted to reveal that the shortlisted candidates for IFN’s Best Overall Islamic Bank 2020, as voted for by you, were: Abu Dhabi Islamic Bank, BankIslami Pakistan, CIMB Islamic, Dubai Islamic Bank and Pakistan’s Meezan Bank.
And the winner is…
Having already been acknowledged as the Most Innovative Islamic Bank, Pakistan’s Meezan Bank was also crowned as IFN’s Best Overall Islamic Bank of 2020 in one of the most tightly contested races for industry accolades.
Meezan Bank’s win is most deserved: in a year wrought with unprecedented difficulties due to the global COVID-19 pandemic, the Islamic bank rose above market challenges to serve the Pakistani public in line with government direction, alleviating economic strain on businesses — small and big — as well as individuals with targeted Shariah compliant financing and bolstering the customer experience and driving financial inclusion with robust digital initiatives while maintaining its market lead as the Islamic Republic’s largest Shariah bank.
When profits were squeezed across most industries, Meezan Bank bucked the trend having managed to boost its bottom line through prudent lending practices and careful investments: it generated a growth of almost 44% in post-tax profit in 2020 at PKR22.67 billion (US$142.08 million). The bank’s firm market position, well-established domestic franchise, sound governance practices, healthy profitability and solid funding base secured it an ‘AA+/A1+’ rating from VIS Credit Rating Company.
Pandemic or not, the Islamic bank did not slow down its activities: it signed numerous partnerships and launched various initiatives to meet urgent market needs including finalizing guidelines for digital mobile accounts, arranging the government’s landmark PKR200 billion (US$1.25 billion) Pakistan Energy Sukuk by Power Holding, launching electronic IPO subscription for brokerage houses, being the first bank in the country to distribute financing through the Prime Minister’s Mera Pakistan Mera Ghar, Low Cost Housing Finance scheme and enhancing its digital architecture through several alliances and investments including collaborating with the government to roll out the groundbreaking Roshan Digital Account which enables the Pakistani diaspora to access banking and investment services in a completely digital environment.
|Best Islamic Bank by Sector|
|Best Central Bank in Promoting Islamic Finance
1st: State Bank of Pakistan 2nd: Central Bank of the UAE 3rd: Bank Negara Malaysia
|Best Islamic Private Bank
1st: Abu Dhabi Islamic Bank 2nd: Meezan Bank 3rd: Bank Muscat (Meethaq Islamic Banking)
|Best Islamic Retail Bank
1st: Dubai Islamic Bank 2nd: Meezan Bank 3rd: CIMB Islamic
|Best New Islamic Bank
1st: United Commercial Bank (UCB Taqwa) 2nd: Mercantile Bank (Mercantile Bank Islamic Banking) 3rd: Midland Bank Salaam
|Most Innovative Islamic Bank
1st: Meezan Bank 2nd: BankIslami Pakistan 3rd: Abu Dhabi Islamic Bank
|Best Islamic Trustee/Custodian
1st:HSBC 2nd: Citibank 3rd: Bank of New York Mellon
|Best Islamic Bank for Treasury Management
1st: Abu Dhabi Islamic Bank 2nd: CIMB Islamic 3rd: Dubai Islamic Bank
|Best Islamic Investment Bank
1st: CIMB Investment Bank 2nd: Citi Islamic Investment Bank 3rd: Maybank Investment Bank
|Best OVERALL Islamic Bank
1st: Meezan Bank 2nd: Dubai Islamic Bank 3rd: CIMB Islamic Bank