Jordan Kuwait Bank announces its 2008 financial results

Mr. Kabariti explained that the overall financial results show a positive growth in terms of the Bank's assets, customers' deposits, credit facilities and profits and indicated that the Bank benefited from its strong capital base to support this growth.

He further explained that since the beginning of this year the Bank surrounded its banking transactions and investment decisions with a set of policies, procedures and controls that were adhered to across all levels with the cautiousness and prudence the Bank is renowned for.

The consolidated financial statements show an overall increase in total assets from JD2016.7m in 2007 to JD2062.8m in 2008, while net credit facilities increased by JD108.3m reaching JD1237.4m, an increase of 9.6% over 2007 figures.

Furthermore, total customers' deposits and cash margins increased to JD1309.4m whereby customers deposits increased by 9.2% over last year figures reaching JD100.6m.

Gross income for the year amounted to JD116.66m, achieving a growth of 20.5% over 2007. Income before tax reached JD68.33m, while income for the year (net of tax and minority interest) amounted to JD46.44m. Total equity - Bank shareholder', rose to JD239.4m, up 10.3% since 31/12/2007.

Mr. Abdel Karim Kabariti pointed to the developments and fluctuations witnessed in the first and second halves of 2008 explaining that the first half witnessed a sharp increase in oil prices and inflation rates as well as expansion in investment fields, particularly in the real estate sector. It also witnessed an increase in consumer and investment lending and was also a period of prosperity for the Amman Stock Exchange.

The GDP achieved an overall growth of around 6%, while the general budget registered growths in both revenues and expenditures. In the second half of the year the situation changed and took a reverse path. Oil prices dropped, some investment projects, particularly in real estate, were halted or postponed and the banking sector became more cautious in extending credit. The record price index reversed its up trend and share prices on the Amman Stock Exchange dropped sharply. In the last quarter of the year, the signs of economic slowdown started to appear whereby some economic entities adopted the wait-and-see attitude.

Kabariti stressed that the bank was able to deal with these developments and hedge against their repercussions through rationalizing its operations, particularly its credit and investment operations. The Bank closely followed the developments and impacts of the global financial crisis since it emerged in the second half of the year as well as the developments on the local economic scene.

In this regard, Mr. Kabariti praised the decision of the Prime Minister by which the government would guarantee all deposits in banks and deposits among them.

This had a positive impact and created an atmosphere of optimism and confidence among investors and citizens alike. Mr. Kabariti also commended the series of early actions taken by the Central Bank of Jordan to minimize the impact of inflation and for adopting monetary policies aimed at reducing interest rates fluctuations and managing the supply and demand factors related to the Jordanian dinar.

He also praised the corrective actions and amendments to some of the banking regulations that aimed at improving risk management and transparency among banks and placed new basis for classification and allocation of provisions as well as lending and liquidity ratios. Said actions helped enhance the stability and strength of the overall banking system and mitigate the effect of the overall economic slowdown across various sectors and its relevant impact on their cash flows.

Mr. Kabariti stressed that for 2009 the Bank will deal with these circumstances and developments objectively and within a set of professional values and sound policies and standards that were endorsed as a governing framework for its work and practices throughout the past years.

He also emphasized the continued support and assistance to the Bank's permanent customers across various economic sectors appreciating the sound dealing, commitment and trust of the Bank's customer base and expressing his conviction of the ability of Jordan's economy to face the repercussions of the current global and local economic conditions.

In this regard, Kabariti noted that the 2009 indicators do not seem negative as a whole, but rather hold many positive elements, which we hope will materialize on the ground. These relate especially to the results of the efforts made by His Majesty the King to promote investment and attract investors, the expanded facilities provided by the Government, and the diversification of Arab investments in sectors beyond real estate and construction to cover manufacturing, tourism and electricity in addition to the signs of success of the new development zones in Maan, Mafraq and Irbid, as well as Aqaba.

Kabariti closed by valuing the support of the Kuwait Projects Company (Kipco) and its growing and strengthened ties with the Bank which reflects positively on the performance of the Bank and the development of its operations and provides an added value that is in the interest of all Kipco Group banks.