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Arab Bank Group H1 net profits down 11.8 per cent at $303 million.

Arab Bank Group's total revenues amounted to $905 million compared to $899 million, rising by 0.7 per cent compared to the same period of last year, with net interest and commission income forming 71 per cent of total revenues. Expenses have decreased by $15.2 million (four per cent), whilst provision for doubtful loans amounted to $124 million as compared to $56 million in previous period.

Total assets reached $48.9 billion, compared with $50.6 billion at the end of 2009, due to the drop of some major currencies against the US dollar. Meanwhile, customer deposits accounted for 70 per cent of Arab Bank's total sources of funds to reach $34.2 billion, compared with $34.9 billion at the end of 2009. In addition, total bank deposits amounted to $5.4 billion compared with $6.3 billion at the end of 2009.

Shareholders' equity stood at $8 billion, constituting 17 per cent of total assets; total capital adequacy ratio amounted to 15.8 per cent exceeding the requirements of both Basel II of 8 per cent and the Central Bank of Jordan of 12 per cent. Further, liquidity ratio as represented by cash and quasi cash accounted for 48 per cent of total assets, whilst loans to deposit ratio stood at 64 per cent.

Arab Bank Executive Chairman Abdel Hamid Shoman said that the bank's profits were generated from the core operational income of the bank represented by interest income and commissions , highlighting that the drop in net profit for the first six months compared to the same period last year is primarily due to the bank's prudent policies against provisions, based on which, Arab Bank has booked additional provisions of $124 million against non-performing and watch list credits, in addition to the global economic conditions which led to lower interest rates on US dollar and other foreign currencies and the low volume of demand for banking facilities which led to a drop in the growth of the loan book.

In May 2010 Fitch affirmed Arab Bank's rating of (A-) long-term with a Stable Outlook. The bank has also been recently reaffirmed by Standard and Poor's with a rating of (A-) and by Moody's with a rating of (A3). Shoman said the affirmation reflects the franchise value both locally and international, geographically diversified assets quality, in addition to the distinctive ratios maintained by the bank and in particular liquidity and capital adequacy.

2009 CPI Financial. All rights reserved.

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Publication:CPI Financial
Date:Aug 3, 2010
Words:419
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