Profits at Amman-based Arab Bank Grouprose by 3.9 per cent to $251 million in 2001. Despite an increase in net interest and commissions to $571.9 million, overall profitability was affected by a rise in provisioning in response to tough market conditions. Provisions rose by 30.2 per cent to reach $69 million.
The profit increase was in line with a 4.3 per cent growth in assets, which stood at $22,228 million at the end of 2001. As a result, return on assets remained unchanged at 1.1 per cent. Loans as a proportion of assets dropped slightly to a conservative 40.2 per cent. According to an Arab Bank official, the profit increase could be attributed to a cautious investment policy and the 'diversification of Arab Bank's portfolio and retail products'. Crucially, the portfolio excluded investments in the beleaguered Jordanian tourist industry, he said.
Established in 1930, Arab Bank is the largest financial institution in Jordan and one of the largest in the region. Despite its traditionally conservative approach to investment, the bank has shown signs recently of moving into new areas such as private sector infrastructure work. Arab Bank is one of the lead partners in a consortium bidding for the Disi water conveyance project, and has also agreed to underwrite the Egypt-Jordan gas supply agreement.
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