Arab Bank sees double digit profit
Dead Sea, Jordan, May 26, 2013
By Suleiman Al-Khalidi
Jordan's Arab Bank , the country's largest lender, said it expects double digit profitability in 2013 as much lower provisions and steady growth in net operating income improves the bank's bottom line.
Chief executive officer Nemeh Al-Sabbagh cited a 7 percent growth in net operating income of the bank in the first quarter, and said that the "full impact of the bank's improved performance in 2013 would show in the second half."
Arab Bank, which has a $45.6 billion balance sheet spread across 30 countries and five continents, has seen a slowdown in profit growth in recent years as it puts aside provisions to cover non-performing loans by businesses reeling from the global downturn.
The bank, one of several major regional and international banks exposed to the debt ridden Saudi conglomerates Saad and Algosaibi, had now fully set aside provisions for their exposure in the troubled firms, Sabbagh told Reuters on Sunday.
Speaking on the sidelines of a World Economic Forum (WEF) conference on the Middle East and North Africa, Sabbagh said that 2013 provisions would be much lower than the $432 million set aside last year and $452 million in the previous year.
He said the wave of political unrest across the region since 2011 would continue to affect business, but a diversified portfolio helped reduce risks.
"We expect the pace of growth to be relatively good despite the economic conditions and turbulence in the region," Sabbagh said.
"In some countries we are doing very well and the only country we are really affected is Syria, but Syria is very small as a size," he added.
Arab Bank's subsidiary in Syria was one of several foreign banks still operating in the violence torn country.
Arab Bank, one of the Middle East's largest financial institutions, owns 40 percent of Saudi Arabia's Arab National Bank ANB.-Reuters