Arab Bank Group structure

Abdel Hameed Shoman, the grandfather of the current chairman, Abdel Hamid Shoman, set up Arab Bank Group in May 1930, with start-up capital of 15,000 Palestinian pounds. The company opened for business in Jerusalem on 14 July of that year.

Arab Bank’s strong historical performance was a result of long-term, prudent and thorough banking practices

After the British Mandate Authority withdrew from Palestine in 1948, the group’s headquarters were transferred to Amman, Jordan, where they remain today.

Arab Bank Group’s main division is Arab Bank, which is a listed company on the Amman Stock Exchange. Its key shareholders include Jordan’s Social Security Corporation with 15.1 per cent, Saudi Oger with 9 per cent, Oger Middle East Holding with 7.2 per cent, and Saudi Arabia’s Finance Ministry with 4.5 per cent.

The group has a series of wholly or partially owned subsidiaries in Jordan and in international markets, including Australia, Sudan, Syria and Tunisia. A sister company, Arab Bank (Switzerland), was set up in 1962 with the same ownership structure as the main group, to offer private banking and trade financing services.

Arab Bank Group operations

Arab Bank Group’s operational history has been one of expansion and retrenchment with the ebb and flow of political developments in the region.

During the 1940s and 1950s, the bank expanded throughout the Arab world. But in the 1960s and early 1970s it was forced to scale back as subsidiaries in Egypt, Syria, Iraq, Sudan and Libya were nationalised. When Israel occupied the West Bank and Gaza Strip in 1967, more branches were closed.

The bank regrouped and expanded internationally in the 1960s. It became the first Arab financial institution to establish a presence in Switzerland, when Arab Bank (Switzerland) opened in Zurich in 1962, and another branch opened in Geneva in 1964. Further expansion came in the 1970s, with new branches in Australia, Germany, Singapore, the UK and the US.

Growth has resumed in the past five years, with Arab Bank Group restarting operations in Syria and setting up a UK-based subsidiary, Europe Arab Bank. It also bought stakes in Turkey’s MNG Bank (since renamed Turkland Bank) and Al-Nisr al-Arabi Insurance in Jordan. In 2008, it gained a licence to operate in Sudan, as Arab Sudanese Bank, and bought 19 per cent of Al-Wahda Bank, Libya’s fifth largest bank.

Arab Bank now has 181 branches in 11 countries, predominantly in the Middle East and North Africa (Mena). It also has representative offices in China, Kazakhstan and South Korea, and an agency branch in the US. Including the operations of its wholly and partly-owned subsidiaries, Arab Bank Group has a presence in 30 countries spanning 5 continents, and employs almost 12,000 staff.

In terms of the services it offers, Arab Bank began with a focus on trade and small construction finance, but gradually expanded into most areas of banking. It now offers services in four major areas: personal banking; corporate and investment banking; private banking; and treasury services. Customers range from private individuals to corporations, government agencies and other international financial institutions.

Arab Bank Group ambitions

Arab Bank plans to continue to expand its branch network through organic growth and add to its range of products and services.

In particular, the bank is aiming to boost its retail banking operations, which currently account for about 30 per cent of all business. The bank says there is more potential for growth. Among the areas likely to be promoted are its banking service for affluent customers, branded as Elite, its children’s service Jeel al-Arabi, and Islamic banking products.

Arab Bank is also planning to launch a cash management product for larger corporate clients this year. Having tested its offering for small and medium-sized businesses in its home market, it plans to roll out that service across its international network. Although further expansion into new markets cannot be ruled out, the bank says it will retain its primary focus on countries in the Mena region.