Abdel Hamid Shoman, Chairman of Arab Bank
Arab Bank announced that group net profits after tax increased by 13% in the first six months of 2011 from $289.5 million to $327.2 million despite the prevailing conditions in the region.
Mr. Abdel Hamid Shoman, Chairman of Arab Bank, commented that these positive results demonstrate Arab Bank’s ability to grow in most of the countries in which it operates and reflects the sound financial positions and conservative risk posture of the bank.
The bank has maintained its Capital Adequacy Ratio at 14.9%, well above regulatory requirements, and a strong liquidity position which will allow it to further grow its core business activities. Customer deposits during the period have grown to $30.9 billion despite the events the region is witnessing and is testimony to the high level of customer confidence which the bank has always enjoyed. Loans have also increased during the first half of the year to $21.8 billion with the portfolio soundly spread across countries of viable economic sectors.
The growth in profits came in tandem with measures taken to bolster the quality of the loan portfolio. During this period, the bank took all the necessary provisions for Al-Gosaibi & Saad groups and no further provisions are necessary. The bank’s loan portfolio continues to be sound despite the tensions in the region; although these events will affect the rate of economic growth and the pace of business activity in some countries.
Net interest income grew by 8.3% and commission income went up by 8.4% during this period. Mr. Nemeh Sabbagh, Arab Bank’s CEO, commented that this increase came largely from the growth in our core banking business and demonstrates the bank’s solid banking franchise.
Demonstrating the important synergies that exist in the bank’s international and regional network, Arab Bank was awarded in March 2011 the mandate to finance and issue all the bonding requirements for the construction of Muscat International Airport at a total cost of $410 million by a consortium of US, Turkish and Omani contractors.
Arab Bank owns 19% of Wehdeh Bank in Libya. As a result of the prevailing conditions in Libya and the inability of Arab Bank to exercise effective control over the bank in Libya, Wehdeh bank was deconsolidated from the results of Arab Bank effective June 30th, 2011, with negligible impact on the profitability of the group.
Arab Bank has a presence in 30 countries in the region and internationally. Mr. Shoman added “We are monitoring the situation in the region but remain optimistic on the long term potential for growth of Arab Bank in the region”.
Arab Bank was established 80 years ago and has successfully operated throughout the region during the various transformations the region has undergone.