Arab Bank Group ups net income by 13% to $305.9m

Arab Bank Group announced on Sunday in a press release that its net income after tax amounted to $305.9 million at the end of 2011, 13 per cent higher than the $270.8 million at the end of 2010. The press statement indicated that net operating income before provisions and taxes stood at $922 million noting that “the 2011 favourable results were achieved despite the challenging general conditions in the Arab region and other areas of the world and in particular the eurozone”. “These positive results reflect the success of the bank, through its prudent and conservative policies, in dealing with the regional and international developments,” the bank said. According to the press release, the bank was able to achieve growth in operating profits in most of the states where it operates despite political, economic, and social developments in more than one country. “It [the bank] also insulated itself from any adverse developments in Libya by deconsolidating the financial statements of Wahda Bank from the group’s financial statements last June,” the bank noted. Besides the 13 per cent growth in net profit, there were improvements in main financial indicators such as the capital adequacy ratio which stood at 15.1 per cent, almost double the 8 per cent minimum required by the Basel Committee and higher than the 12 per cent minimum required by the Central Bank of Jordan. Deposits went up by more than $1 billion to $31.7 billion, thereby boosting liquidity, traditionally a hallmark of strength for Arab Bank. Chairman Abdel Hamid Shoman said in the press statement that the growth in total deposits reflects the high level of confidence of customers in the financial strength of Arab Bank and highlighted that these results were achieved through the bank's concerted efforts to enhance liquidity and capital adequacy, and through effective risk management. He added that the results will add to the strength of the bank's capital base, which has reached 47.7 billion at the end of 2011. Nemeh Sabbagh, chief executive officer of Arab Bank, said the bank focused on increasing its operating profits through revenue growth and expense control stressing that expenses during the year showed nil growth. Sabbagh added that the bank has continued to improve the quality of its credit portfolio, and has in this respect increased the provisions coverage ratio to reach more than 100 per cent of non-performing loans, excluding the value of collaterals. Based on these results, the board of directors is recommending to the general assembly of shareholders an increase in the distribution of dividends to 25 per cent for 2011 as compared to 20 per cent in 2010.