Arab Bank profit up on increased lending

Arab Bank Group, Jordan's biggest lender, said on Saturday it posted a 15.6% rise in net profit to $572 million for the first nine months of 2007 compared to last year as it tapped more lending projects.

Arab Bank, one of the Middle East's largest financial institutions, said pre-tax profit rose 13.6% to $753.4 million in the January-through September period from $663.2 million in the same period last year.

Arab Bank's Chairman and CEO Abdel Hamid Shoman said in a statement the results "reflected the bank's ability to diversify its investments and develop its operations".

Arab Bank said the bank's expanding project finance activities boosted it's loans portfolio to both corporate and retail customers to $18 billion, constituting more than 48.5% of total assets.

"Arab Bank has expanded its activities in credit markets by managing more large to medium sized syndicated loans," Shoman said.

This compared with $13.4 billion loan portfolio that constituted 44% of the bank's total assets in the same period last year.

Bankers say the bank which has sought to expand its foothold in the lucrative Arab Gulf banking market's syndicated loans growth, especially in infrastructure and energy projects, from a booming regional business environment.

Arab Bank's project related finance and trade operations in the oil rich region has also picked up with the bank this year participating more aggressively in large syndicated loans for major corporations.

Shoman said total assets of Arab Bank Group, which includes Arab Bank Switzerland headquartered in Zurich, rose 22% in the nine month period of 2007 to $37.2 billion against the same period last year.

Total shareholders equity rose to $6.6 billion in the nine month period from $5.7 billion and accounted for 17.8% of total assets, Shoman said, adding it enhanced the capital adequacy ratio to 22.3%.

Shoman said the total balance sheet stood at $52.6 billion by end of September compared to $42.2 billion the same period last year.

The bank maintained a high liquidity ratio of 44.4%.

The bank's customer deposits rose 17.9% to $24.1 billion against $20.4 billion in the same period last year.

The largest single shareholder in the bank, which constitutes over 40% of Amman bourse capitalisation, is the family of Lebanon's former Prime Minister Rafik Al-Hariri, with almost 20%.

It owns 40% of Saudi Arabia's Arab National Bank. Around 42% is owned by local investors. - Reuters

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