Arab Bank of Jordan reports 26% increase in profit during first nine months of this year
Arab Bank, Jordan’s biggest lender, reported a 26 per cent rise in net income for the first nine months of 2021, amid an increase in customer loans.
Net profit after tax rose to $271.7 million, compared with $215.2m in the same period last year, Arab Bank said.
The “solid results” underscore the bank’s strategy to maintain sustainable growth despite a “challenging environment” and its continued focus on its digital transformation strategy, said Sabih Masri, chairman of the board of directors.
Banks across the world have faced a tougher operating environment, with pandemic-driven challenges tipping the global economy into its worst recession since the 1930s.
Historically low interest rates have also made it difficult to boost profits. However, the global economy has bounced back this year, easing pressure on lenders’ profitability.
Jordan’s economy is forecast to grow 2 per cent this year – little changed from 2020 – as the gradual return of tourists, Covid-19 vaccination efforts and rising global demand support a rebound in the second half of 2021, the International Monetary Fund said.
Arab Bank, which has more than 600 branches across five continents, grew its loan book by 28 per cent to $34.1 billion in the first nine months of 2021, while its customer deposits rose 24 per cent to reach $46.6bn.
It attributed the growth in part to the consolidation of the financial statements of Oman Arab Bank under its accounts in the first quarter of 2021. The consolidation of Oman Arab Bank “materially” increased customer deposits and loans by $7bn and $7.5bn, respectively.
Arab Bank’s net operating income increased by 6 per cent to reach $856.9m.
The group has a “strong” capital base with a loan to deposit ratio of 73.1 per cent, equity of $10.4bn and a capital adequacy ratio of 16.8 per cent, said Nemeh Sabbagh, the bank’s chief executive.
It continues to hold credit provisions against non-performing loans of more than 100 per cent, he emphasised.
Arab Bank said it launched Reflect, the first neobank in Jordan, which provides “a branchless experience to millennials” through a single banking app.