Jordan Kuwait Bank announces its 2005 results

The results were yet another proof of progressive trend in the bank's growth rates and performance indicators, which have accompanied JKB over the past few years.

Total assets grew by 59% to USD 1988 million, with an increase of USD 738 million over 2004, Credit facilities (net) amounted to USD972 million in 2005, a remarkable 54.7% growth over last year's figure. JKB's market share of credit facilities improved and reached 8% of the Jordanian banking sector. Kabariti reaffirmed that, with this considerable increase in the credit facilities, JKB's credit portfolio maintained its diversified base, sound collaterals and clear objectives, thus securing consistent growth rates. As for liabilities, customers' deposits increased dramatically by 46.9 % and reached USD1113 million. Cash margins also recorded a growth of 43.9% and reached USD224 million by end of the year.

Kabariti stated that JKB Group achieved a profit before tax of USD55.5 million; an increase of USD16.4 million over 2004 figures and a growth of 42%. Most profits achieved in 2005 resulted from core banking activities and transactions. The Bank's subsidiaries (Arab Orient Insurance Company and United Financial Investment Company) have both contributed to the 2005 group profits. The total net profit of both companies reached USD9.5 million in 2005 compared to USD3.7 million in 2004. This year, gross income recorded an increase of 42.6% compared to last year and reached USD85.8 million with net revenue from interest and commissions representing 69.3% thereof. By end of 2005, total shareholders' equity of the Group grew by USD29.5 million to reach USD153 million; an increase of 23.9% compared to the previous year. JKB shareholders' equity reached USD145 million compared to USD118 million in 2004.

These results indicate JKB's competence to meet, and in many cases, surpass the best ratios and standards set on the local and international levels. Return on equity rose from 35% to 40.13%, while the return on average assets maintained its level of 3.42% compared to 3.45 % last year. The ratio of general and administrative expenses to average assets recorded a clear improvement as it decreased to 1.59% from 1.87% in 2004.

Kabariti announced that in view of the 2005 financial results, the Board of Directors had decided to recommend to the Bank's General Assembly an increase in the Bank's capital from JD 40 million (USD56.4m) to JD 60 million (USD84.6m), through the capitalization of JD 20million (USD28.2m) of profits and reserves to be distributed to shareholders in the form of one half of a share per existing share.

Kabariti added that the Board of Directors will discuss in its next meeting the appropriate ways to provide more support to the capital base and shareholders' equity in order to maintain this progressive growth in JKB operations as well as enhance the Bank's potentials to meet the requirements of the targeted growth, in terms of volume and quality, in the fields of lending, investment and project financing.