Jordan's Arab Bank H1 net profit rises 25.8%

BIG FISH: Arab Bank represents 40 percent of the Jordanian stock market's total capitalisation. (Getty Images)

Jordan-based Arab Bank, said on Saturday it posed a record net profit of $465.9 million, up 25.8 percent from the year-earlier period, on higher diversified income and project finance in the Arab Gulf.

Chairman and CEO Abdel Hamid Shoman said in a statement that better utilisation of assets had "contributed to the results of the bank and a bigger market share in the fast growing Arab banking sector.

The bank, one of the Middle East's largest financial institutions, said its first-half pre-tax profit reached $616.8 million this year compared to $495.4 million in the same period last year.

The total assets of Arab Bank Group, which includes Arab Bank Switzerland headquartered in Zurich, rose in the first half to $47.1 billion compared to $35.7 billion in the same period last year.

The bank has been studying acquisitions as part of an expansion drive, and sought a foothold in Egypt and expanding its presence in Syria along with a stronger foothold in the Arab Gulf region.

It finally secured a foothold in the potentially lucrative Libyan market rich in oil and gas reserves after its acquisition last February of 19 percent of Libya's Wahda Bank with a bid of 210 million euros. It has the right to eventually raise its stake to 51 percent.

The Libyan bank with total assets of around 1.7 billion euros and 71 branches is described as Libya's second-largest commercial bank in terms of total gross loans.

Arab Bank's project-related finance and trade operations in the oil-rich Arab Gulf region is expanding, with the bank participating more aggressively in large syndicated loans for major corporations, Shoman said.

Arab Bank's loans portfolio rose $22.6 billion in the first half of 2008 compared to $16 billion in the same period last year, constituting 47.9 percent of total assets.

Total shareholders' equity rose to $7.7 billion from $6.3 billion and accounted for 16.3 percent of the bank's total assets, Shoman said, adding the capital adequacy ratio stood at 17.7 percent.

The largest single shareholder in the bank, which constitutes over 40 percent of Amman bourse capitalisation, is the family of Lebanon's former Prime Minister Rafik Al-Hariri, with almost 20 percent. It owns 40 percent of Saudi Arabia's Arab National Bank.

Arab Bank's geographic diversification - 70 percent of the bank's assets, funding, capital and revenue lie outside Jordan in 26 different countries - has helped it weather regional turmoil. (Reuters)

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