08 Oct, 2008

Shoman: "Arab Bank unaffected by int’l financial crisis"

Arab Bank enjoys a strong and sound financial and credit position and the global financial crisis has not affected its performance, Arab Bank Chairman/CEO Abdul Hamid Shoman said on Tuesday.

He highlighted “prudent policies” the bank follows as the reason behind the immune situation of the institution, adding that such policies are designed to ensure effective risk management in the market where the bank and Arab Bank Group operate.

Meanwhile, Shoman announced in a statement yesterday that Arab Bank Plc.'s profits during the first nine months of this year rose by 16 per cent compared to the same period last year.

Profits during the first three quarters stood at JD367.3 million before taxes and after provisions, compared with JD317.9 million during the same period last year with an increase by JD49.4 million, said Shoman.

He said Arab Bank Group net profits before taxes and after provisions during the first nine months of 2008 amounted to $843.2 million, compared with $714.4 million in the same span last year with an increase of $128.8 million and a growth rate of 18 per cent.

Commenting on Arab Bank's disclosure, Jawad Kharouf, president of the Association of Certified Capital Market Professionals, said: "The disclosure of Arab Bank on how it is not affected by the global financial crisis is excellent. It puts an end to the rumors about the bank in the market. This is exactly what we need to stop the dumping of shares in the market. Other banks should also make it clear about their financial status in light of the crisis." 
"The disclosure by Arab Bank is the beginning to restore the investors' confidence in the Amman Stock Exchange. Such disclosures reassure investors and we hope other banks follow suit," Kharouf told The Jordan Times on Tuesday.

Shoman said in the statement that Arab Bank, whose prudent policy relies on keeping high percentages of liquidity, still maintains a liquidity ratio that is considered the highest among working banks at the regional and international levels.

Arab Bank maintains high percentage of capital adequacy that stands at 17 per cent for Arab Bank and 18 per cent for the Arab Bank Group, Shoman said in the statement. 
On the impact of the global financial crisis on Arab Bank, Shoman said it is only restricted to Arab Bank's participation in corporate bonds issued by Leman Brothers, where Arab Bank’s share stood at a total volume of $20 million.

As a preemptive measure, the bank took full allocations for the whole volume with a special refund ratio that amounted to 40 per cent of the total amount.

Shoman said the bank's policy in diversifying investments at sectoral and geographical levels and in adopting conservative banking and investment policies are constants at Arab Bank Plc. throughout the nearly eight decades since its inception, stressing that the bank will continue to implement its strategic plan that proved its large success and realized profitable returns

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