Arab Bank Group's 2015 net operating income exceeds $1.1b

AMMAN — Arab Bank announced in a press statement on Saturday that net operating income at the end of 2015 amounted to $1.1 billion. 

According to the statement, net income after tax and provisions stood at $442 million compared to $557 million in 2014 after taking into account $349 million as legal provisions.

"This follows a settlement agreement which was entered into without any admission of wrongdoing and upon terms satisfactory to the bank with respect to the legal case which was filed against the bank in New York 11 years ago," the statement said.

"The bank has been setting aside provisions for the case during the past several years which at the end of 2015 stood at $1 billion and which will cover the expected obligations under the settlement agreement," it added.

Aside of this allocation, the underlying performance of the bank was strong in 2015. 

Excluding the effect of foreign currency devaluations, loans and advances rose  by 3 per cent to $23.8 billion and customer deposits grew by 3 per cent to $35.2 billion. 

Total group equity was given at 48 billion and capital adequacy ratio was at a healthy level of 14.2 per cent. Liquidity continues to be high with a loan to deposit ratio of 67.6 per cent.

Chairman Sabih Masri attributed the strong underlying performance of the bank to the success it has had in growing its business across different markets while at the same time managing risks very effectively. 

"Arab Bank succeeded in growing its operating profit by taking advantage of the broad diversification of its business in Jordan and across the region," he said in the statement.

Chief Executive Officer Nemeh Sabbagh stated that the bank succeeded in growing its revenues and in controlling its expenses which allowed it to achieve a healthy cost-income ratio of 42.3 per cent. 

He indicated that the bank’s loan portfolio continues to be healthy with the ratio of non-performing loans to gross loans improving to 4.8 per cent despite the challenging conditions in the region. 

"Credit provisions held against non-performing loans stood at a comfortable 109 per cent, excluding the value of collaterals held," he said.

Masri expressed his full confidence in the bank’s ability to maintain its leading position regionally and to continue achieving its targeted objectives.

In light of this strong performance, the board of directors is recommending the payment of cash dividends at a rate of 25 per cent.

The bank’s results are subject to the final approval of the Central Bank of Jordan.