Jordan’s Arab Bank Group posts 35% profit rise for 2018
Controlled expenses and sustainable growth drove improved performance last year
Arab Bank Group, Jordan’s largest lender and the biggest publicly traded company on the Amman bourse, reported a 35 per cent year-on-year increase in net income for 2018, and recommended a 45 per cent cash dividend to shareholders.
Full-year net income rose to $820.5 million, from $533m in 2017, the lender said on Saturday. The profit rise was attributed to sustainable growth of the business and reduced corporate spending.
“The solid results of Arab Bank Group for 2018 were driven by sustainable growth in the underlying business and well controlled expenses,” said chief executive Nemeh Sabbagh.
Total loan facilities increased by 3 per cent year-on-year to $25.8 billion, and customer deposits increased to $34.3bn. The group’s equity grew to reach $8.7bn over the year, while return on equity increased to 9.5 per cent, the bank added.
The board of directors recommended to shareholders the distribution of a 45 per cent cash dividend for the financial year 2018, in view of the results. The dividend has yet to be approved.
The 2018 financial statements are subject to approval from the Central Bank of Jordan, according to Arab Bank Group. The lender had yet to file final financial statements to the Amman stock exchange at the time of writing.
Arab Bank Group noted that legal cases filed against the bank in 2014 have been resolved, converting $325m of excess legal provisions into income. The group also said it booked a $225m impairment against the value of its investment in Turkey, the amount of which is mainly the result of currency depreciation.
The bank’s loan-to-deposit ratio stood at 75 per cent for 2018, and its capital adequacy ratio improved to reach 15.6 per cent.
“The strong performance shows the success of the group in dealing with the challenging and changing operating environment and reflects the group’s prudent operating policies,” said Sabih Masri, Arab Bank Group chairman.
The bank’s asset quality is high, he added, with credit provisions held against non-performing loans standing above 100 per cent, excluding the value of collaterals.
Updated: February 2, 2019 06:51 PM