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Tue 4 Aug 2009 08:28 PM

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Arab Bank says H1 profit down 26%

UPDATE 2: Jordan bank says exposure to Saudi's Saad and Algosaibi will not impact financial position.

Jordan's Arab Bank said on Tuesday that first-half net profit fell 26.2 percent to $343 million. Pretax profit, after provisions, slipped 26.7 percent to $452 million as the global financial crisis continued.However, the group, which includes Arab Bank Switzerland based in Zurich, said both its deposits and assets showed healthy rises in the first six months of the year.

Assets rose 6 percent to $48.5 billion from $45.6 billion at the end of last year, while deposits increased 4.8 percent to $32.9 billion.

Total shareholders' equity rose 3 pct to $7.7 billion since the start of the year, 16 percent of total assets.

Arab Bank said last June it was exposed to Saudi Arabia's troubled groups Saad and Al Gosaibi but this would not affect its financial position.

The bank did not give details but said it extended long-term loans to the groups in exchange for "cash, real estate collateral, stocks and personal and institutional guarantees."

Bankers say the perception that Arab Bank, whose geographic diversification has helped it weather past turmoil in the region, was a safe haven during the current global financial crisis, helped push deposits up 24 percent to $31.9 billion in the first quarter.

The firm is one of the Arab world's largest privately owned banks, with nearly 25 percent owned by the family of Lebanon's former prime minister, Rafik al-Hariri, and over 20 percent held by Jordan's social pension fund. The rest is owned by mainly long-term investors.

Arab Bank owns 40 percent of Saudi Arabia's Arab National Bank. (Reuters)

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