Arab Bank posts $1.06bn in 2008

Arab Bank and its banking group's performance for the fiscal year 2008 was a continuation of its successes in the previous years, as operational and net profits hit a historical record since the bank was established 78 years ago. Arab Bank's profits before taxes and after provisions exceeded $1bn figure by the end of 2008 to amount to $1.06bn, compared with $964 in 2007, with a growth rate of (10%).

Net profits rose in 2008 to $840m, compared with $775m in the previous year, increasing by $65m or (8.4%).

Commenting on these record results, Arab Bank's Chairman/CEO Abdel Hamid Shoman said:

"2008 witnessed major developments and sharp fluctuations in commodity prices and production costs, while the global economy suffered the repercussions of the global financial crisis, which extended to regional and Arab markets."

Shoman maintained that year 2009 would be a difficult year with many challenges for all countries of the world, yet with varying degrees. The world economic growth will remarkably decline to minimum levels, which will signify a significant challenge to the banking industry around the globe.

Shoman highlighted the strength of the Jordanian banking industry, admiring, at the same time, the prudency of the fiscal policy adopted by the Central Bank of Jordan and the firm application of international standards in order to maintain the soundness of the Jordanian banking system in terms of liquidity and capital adequacy as well as assets quality.

Shoman noted that Arab Bank maintains high capital solidity and liquidity levels, emphasizing that the customer confidence the bank enjoys is the outcome of a committed vision that is subject to strict control. He said Arab Bank has taken this approach in all the countries where it operates, out of its commitment to entrenching its leading status and relentless efforts to maintain its position in the forefront of international financial institutions.

He underlined the fact that numerous individual and corporate customers decided last year to make deposits with Arab Bank's local and overseas branches, a matter that highlights customers' perception of Arab Bank as a safe haven for the deposits. He noted that customers' deposits grew by the end of last year to $31.4bn, compared with $24.7bn at the end of 2007, with an increase of (27%). The deposits constituted at the end of last year (69%) of Arab bank Group's assets.

Shoman also pointed out growth in all items on the balance sheet, where the total assets of Arab Bank rose last year to $45.6bn, compared with $38.3bn at the end of 2007, recording an increase of (19%). Meanwhile, the credit facilities portfolio grew to $22.5bn compared with $19.4bn at the end of 2007. The credit facilities portfolio constituted (49%) of total assets.

On the other hand, Shoman indicated that shareholders equity amounted to $7.5bn, compared with $6.8bn in 2007, recording a growth of (9.5%), and enhancing capital adequacy, which reached 16.2%, well above the requirements of the Regulatory bodies and Basel II. Arab Bank has managed to maintain a high level of liquidity at (45%), which gave the bank an edge over peers. Additionally, Return on Equity Ratio stood by the end of last year at (11.2%), while the ratio of operational costs to net revenues, which measures performance efficiency, was (44%).

Shoman said the bank is proceeding with implementing its strategy that has proved successful in steady steps and an ambition to achieve more successes and progress further. In 2008, he added, the bank expanded its banking and investment base in line with a well-studied and well-implemented banking plan that entailed the introduction of innovative products and services that fit the needs of customers on the one hand, and assert Arab Bank's role as a key player in the banking industry, on the other.

Shoman added that Arab Bank's achievements last year enhanced its international rankings. Moody's gave the bank A2 and stable outlook, while Fitch and Standard & Poor's both gave the bank A- in recognition of the bank's conservative risk policies and the quality of sectoral distribution of credit facilities at Arab Bank, a matter which resulted in a safety net that helped evade the repercussions of economic and financial crises and market instability.

Meanwhile, the Board of Directors recommended to the General Assembly, which will meet on Friday March 27 to endorse the distribution of cash dividends to shareholders at (25%) of the share's nominal value, equivalent to JD133.5m.

Shoman thanked Arab Bank's customers and shareholders, and urged employees to exert more efforts to maintain the leading position of the bank and achieve more accomplishments.