Arab Bank profits up 10pc to $360m
Amman, July 29, 2012
Jordan's Arab Bank Group saw its first-half net profits rise by 10 percent to $360 million compared with the same year-ago period due to lower provisions and a rise in operational income despite political upheaval that hit the region, a bank statement said.
Chairman Abdel Hamid Shoman said the bank, one of the Middle East's major financial institutions with a strong presence across the region, saw deposits rise 3.6 percent to $32 billion at the end of June 2012 against the same period last year.
"The results reflected the strength of the bank and its ability to benefit from its global reach and also its success in dealing with the regional and international uncertainty and adopting prudent credit polices," Shoman said.
Bankers say the bank's geographic diversification which has helped it weather turmoil in the past helped it to partially offset the impact of a wave of unrest in the region.
Most Jordanian banks have set aside higher provisions to cover possible defaults and non-performing loans by businesses and real-estate firms reeling from the impact of the global downturn and regional uncertainty on the aid-dependent economy.
Bankers said while the credit provisions weighed on profit, the Arab Bank was cushioned by a healthy capital base and $7.7 billion of shareholders equity.
Total capital adequacy ratio reached 14.81 percent at the end of June 2012, well above regulatory standards.
The firm is one of the Arab world's largest privately owned banks, with nearly 20 percent owned by the family of Lebanon's former prime minister, Rafik Al-Hariri, who was assassinated in 2005, and a similar size stake held by Jordan's social pension fund. The rest is mainly held by long-term investors. Arab Bank owns 40 percent of Saudi Arabia's Arab National Bank ANB. - Reuters