Low international interest rates pulled down the group’s net interest income for the first nine months of the year to $337 million, compared with $353 million for January-September last year. Falling regional and Latin American capital markets contributed to the 8 per cent year-on-year decline in non-interest income, which amounted to $205 million in the first three quarters of 2002. The resulting decline in operating income led to an increase in the overhead expense ratio, although, at $346 million, operating expenses were only marginally higher than those recorded in the first nine months of 2001.

The bank’s total assets grew 8 per cent in the first nine months of the year to $28,800 million, compared with a 7 per cent increase in 2001. The loan/deposit ratio increased to 67 per cent by the end of September 2002 from 63 per cent in September last year. Loan loss provisions for the first three quarters of the year amounted to $90 million, up from $61 million in 2001.

With 2003 shaping up as another difficult year for banks, ABC does not expect to reverse this year’s losses in the near term and expects to end 2002 with overall profits down year-on-year. However, the management is hopeful that losses will be minimised. ‘The fact that our earnings have declined by so little in the face of such adversity is the clearest possible indication of ABC’s core strengths,’ the group’s president Ghazi Abdul-Jawad said when the results were announced.

In a recent interview with MEED, Abdul-Jawad said that the bank would continue with its strategy of focusing on the Arab world (MEED 25:10:02).