Arab Bank Group reported net income after tax for the first quarter of 2020 of $147.6 million as compared to $231.8 million for the prior period, recording a decrease of 36%.

Total loans amounted to $26.2 billion as of March 31, 2020 compared to $25.8 billion for the same period in the previous year, with a growth rate of 2%, while customer deposits grew by 5% to reach $35.2 billion compared to $ 33.7 billion for the same period in the previous year. The Group maintained its strong capital base with equity of $9.2 billion and a capital adequacy ratio of 16.5%.

Mr. Sabih Masri, Chairman of the Board of Directors remarked that the performance of Arab Bank confirms the success of the diversified business model of the Group regionally and globally. He also pointed out that the next phase will be challenging for the global and regional economies and will witness a slowdown in growth and difficulties for various sectors as a result of the outbreak of the Coronavirus pandemic. Mr. Masri added that he has great confidence in the Bank’s ability to deal with the challenges that lay ahead and noted that the Bank has in previous years demonstrated its effectiveness in operating in challenging economic environments.

Mr. Nemeh Sabbagh, Chief Executive Officer, commented that the Group net operating income dropped by only 2%, but the Bank opted to build more provisions during the first quarter of 2020 as a precautionary measure against the financial implications of COVID-19, and this resulted in the decrease in the reported net income after tax.

Mr. Sabbagh added that Arab Bank Group enjoys high liquidity and strong and robust capitalization. The Group’s loan-to-deposit ratio stood at 74.4% while the capital adequacy ratio calculated in accordance with Basel III regulations is at 16.5%, and credit provisions held against non-performing loans continue to exceed 100%. Commenting on the negative economic repercussions resulting from the outbreak of COVID-19, Mr. Sabbagh stated that the global banking sector will experience challenges as a result of the economic slowdown, the higher cost of risk and lower interest rates.

Mr. Masri concluded by remarking that Arab Bank was careful to take the necessary measures to protect the wellbeing of its employees and customers. He further added that Arab Bank has donated JD 15 million as part of its social responsibility in support of Jordan’s national efforts to combat the COVID-19 crisis and mitigate its health, economic and social repercussions on the Kingdom.

Arab Bank Group closed 2019 with solid results reporting net income after tax of $846.5 million as compared to $820.5 million in 2018, recording a growth of 3.2%.  Net income before tax grew to reach $ 1.15 billion as compared to $ 1.12 billion in 2018, while Group equity grew to reach $9.102 billion with a return on equity of 9.3%.

In view of the solid results, the Board of Directors has recommended to the shareholders the distribution of 30% cash dividends for the financial year 2019, making a total dividend payout of over $ 270 million.

The Group’s net operating income grew by 5% driven by growth in interest and fee income. Credit facilities grew by 1.2 % to reach $ 26.1 billon while customer deposits increased by 6%, or by almost $ 2 billion, to reach $36.2 billion. Revenues grew by 4.6% to reach $ 2.23 billion, and these have been generated broadly from both the local and international network, with the latter comprising close to 70% of total revenues. Total expenses recorded a decrease of 3% from 2018.

The Group managed to further grow its equity by 5% during the year to reach over $ 9 billion despite the exceptional distribution of 45% cash dividend for the year 2018, following the dismissal of the legal case.

Mr. Sabih Masri, Chairman of the Board of Directors, stated that this strong performance confirms the success of the Group in dealing with the challenging and changing operating environment and reflects the Group’s prudent operating policies. Mr. Masri stated that the broad network of the Group across countries in the region and globally provides the benefit of diversified sources of income, and added that the Group has demonstrated that it has the right strategy and footprint to deliver value for its shareholders.

Mr. Nemeh Sabbagh, Chief Executive Officer, stated that Arab Bank continues to deliver consistent and sustained growth, while investing for the future through the prudent and efficient deployment of capital, and by building a resilient balance sheet through its disciplined and proactive approach to risk management.

Mr. Sabbagh further added that while the operating environment for most regional economies remains challenging, Arab Bank’s strength, its broad and loyal customer base, diversified business model and wide geographical diversification, and its ability to leverage its unique brand and global network ensured that the performance of the Group remained strong.  Mr. Sabbagh added that the performance in 2019 reflects the continued success of the bank’s business model.

Mr. Nemeh Sabbagh also stated that the solid results of Arab Bank Group for 2019 were driven by sustainable growth in the underlying business and by well controlled expenses. He added that Arab Bank Group maintains a well funded balance sheet, strong liquidity and robust capital position. He further added that the Group enjoys strong, prudent and healthy fundamental financial metrics. The Group’s loan-to-deposit ratio stood at 72.1 % while the capital adequacy ratio calculated in accordance with Basel III regulations is at 16.2 %. Asset quality of the Group remains high and credit provisions held against non-performing loans continue to be above 100%.

Mr. Masri concluded by remarking that the encouraging results will continue to support the strong financial performance of the Group and its position in its markets and that the bank will maintain its strong financial position and will aim to deliver to its shareholders healthy and sustainable dividends.

Arab Bank was named “The Middle East’s Best Bank 2019” by Euromoney - London and “Best Bank in the Middle East for 2019” by Global Finance, New York for the fourth year consecutively.

The 2019 financial statements are subject to the approval of the Central Bank of Jordan.