Arab Bank Group posts $410 million as before tax and after provisions income
2010-08-01
Arab Bank Group’s net income before tax and after provisions for the six months ended 30 June 2010 amounts to $410 million, a drop of 9% from prior period net income of $452 million. Arab Bank Group’s net income after tax amounts to $303 million, a drop of 11.8% compared to prior period net income of $343 million. According to Arab Bank Group"s financial statements for the six months ended 30 June 2010, total revenues amounted to $ 905 million compared to $899 million, rising by 0.7% compared to the same period of last year, with net interest and commission income forming 71% of total revenues. Expenses have decreased by $ 15.2 million (4%), whilst provision for doubtful loans amounted to $124 million as compared to $56 million in previous period. On the other hand, 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% of the Bank’s total sources of funds to reach $34.2 billion, compared with $34.9 billion at the end of 2009. In addition, total banks deposits amounted to $5.4 billion compared with $6.3 billion at the end of 2009. Shareholders’ equity stood at $8 billion, constituting 17% of total assets; total capital adequacy ratio amounted to 15.8% exceeding the requirements of both Basel II of 8% and the Central Bank of Jordan of 12%. Further, liquidity ratio as represented by cash and quasi cash accounted for 48% of total assets, whilst loans to deposit ratio stood at 64%.
Commenting on the results, Arab Bank Executive Chairman/ Mr. 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, the 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.
Mr. Shoman noted that, in recognition of its outstanding ranking in the banking sector, Fitch has in May 2010 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). The affirmation of Arab Bank’s 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.
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