Arab Bank Group 2010 net plunges 53pc
Amman, January 31, 2011
Arab Bank Group, one of the leading financial groups in the Middle East, has posted a 53 per cent drop in its 2010 net profit.
The net profit touched $251 million after it set aside hefty provisions for bad loans for a second consecutive year.
Announcing the results on Monday, the bank said its net pretax and after provisions income amounted to $486.8 million during 2010, while operational revenues amounted to $1.76 billion compared to $1.77 billion for the previous year.
Net interest income amounted to $1.02 billion and forming 58 per cent of total revenues, while commission income have increased by $37.9 million to reach $320.6 million for the year ended December 31, 2010 as compared to $282.6 million at the end of 2009 and forming 18 per cent of total revenues.
The bank said the gains from financial assets surged to $58.8 million compared to $21.9 million the previous year, whilst provision for doubtful loans amounted to $473 million as compared to $204 million at the end of 2009.
Income from associated companies fell by $52 million to reach $239.2 million compared to $291.2 million the previous year.
On the other hand, total assets increased to $51.1 billion from $50.5 billion at the end of 2009. Customer deposits accounted for 70 per cent of the bank’s total sources of funds which rose to $35.7 billion from $34.9 billion at the end of 2009.
In addition, total banks deposits amounted to $5.8 billion compared with $6.3 billion at the end of 2009. Credit facilities grew by $464 million to reach $ 22.5 billion compared with $22 billion at the end of 2009 and forming 44 per cent of total assets, whilst investment portfolio amounted to $ 8 billion at the end of 2010 and forming 16 per cent of total assets.
Shareholders’ equity stood at $ 8.3 billion, whilst total capital adequacy ratio is at 15.1 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 reached 49 per cent, whilst loans to deposits ratio stood at 63 per cent.
Abdel Hamid Shoman, executive chairman of Arab Bank said the net income before tax generated by the Jordan bank during 2010 has grown by 9 per cent over the previous year. The net operating income of Arab Bank Group has grown by 3 per cent during the same period, after excluding the Bank's share of profits from affiliate companies.'
According to him, the group’s profits declined by 46 per cent as a result of lower profitability by a number of subsidiaries and affiliates which operate across many different markets that were subject to the global financial crisis, which has led to higher provisions booked against non performing and watch list loans.
According to Shoman, the board of directors have recommended the distribution of cash dividends to shareholders at 20 per cent of the nominal value of shares, or equivalent of JD106.8 million ($150.5 million).-Reuters and TradeArabia News Service