AMMAN (JT) -- Arab Bank announced Sunday that the group's net pretax and after provisions income reached $486.8 million during 2010.
According to Arab Bank Group`s financial statements for the year ended December 31,2009, operational revenues amounted to $1,764.7 million compared with $1,774.2 million for the year ended December 31, 2009.
The bank's net pretax and after provisions income in 2009 amounted to $782.8 million.
Net interest income amounted to $1.02 billion, representing 58 per cent of total revenues, said the statement that was issued by the Arab Bank Group yesterday, indicating that commission income went up by $37.9 million to reach $320.6 million in 2010 compared to $282.6 million at the end of 2009.
Gains from financial assets reached $58.8 million last year compared to $21.9 million in 2009, according to the statement, which revealed that provision for doubtful loans amounted to $473 million as compared to $204 million at the end of 2009.
The statement explained that income from associated companies has decreased by $52 million in 2010 to $239.2 million from $291.2 million generated in 2009.
The bank's assets increased to $51.1 billion last year from $50.5 billion at the end of 2009, said the press statement, pointing out that customer deposits accounted for 70 per cent of the bank's total sources of funds to reach $35.7 billion, compared with $34.9 billion in 2009.
Total deposits stood at $5.8 billion in 2010 compared with $6.3 billion at the end of 2009, credit facilities grew by $464 million to reach $22.5 billion compared with $22 billion at the end of 2009, representing 44 per cent of total assets, while investment portfolio amounted to $8 billion at the end of 2010.
Shareholders' equity stood at $8.3 billion, the statement noted, stating that total capital adequacy ratio is at 15.1 per cent exceeding the 8 per cent required by Basel II and the 12 per cent requirements of the Central Bank of Jordan.
The group announced that liquidity ratio as represented by cash and quasi cash reached 49 per cent, while loans to deposits ratio stood at 63 per cent.
Stating that the net income before tax generated by Arab Bank in Jordan in 2010 has grown by 9 per cent over the previous year, Abdul Hamid Shoman, executive chairman of the Arab Bank attributed that 46 per cent drop in the group's profits was due to lower profitability by a number of subsidiaries and affiliates which operate across different markets and which were affected by the global financial crisis as it has led to higher provisions booked against non-performing and watch list loans.
Shoman elaborated that the decision to take these provisions for more than the minimum required by regulatory authorities is a strategic move aimed at maintaining the quality of the bank's credit portfolio and to provide for the credit facilities of clients, who were affected unfavourably by the economic conditions experienced by most countries across the world.
This move also aims to strengthen the bank's ability to cope with any future volatility that may arise, he said, stressing that those provisions are not considered total losses, and can be returned to income in the event of collection or liquidation of collaterals taken against them.
Meanwhile, the board of directors of Arab Bank recommended to the general assembly, which will meet on March 30, the distribution of cash dividends to shareholders at 20 per cent of the nominal value of shares, or the equivalent of JD106.8 million.
© Jordan Times 2011
