Jordan Central Bank dismisses board of directors of Jordan Gulf Bank
The Central Bank of Jordan (CBJ) ordered on Sunday, February 2, the dismissal of the board of directors of Jordan Gulf Bank (JGB) and appointed a managing committee for the troubled financial institution, CBJ’s Governor Amiyya Tuqan disclosed. The bank’s vice chairman, Fuad Bjali, has resigned earlier this month.
The committee, headed by a member of CBJ’s board of directors, Thabet Al-Taher, is hoped to strengthen the bank’s financial standings ahead of JGB’s anticipated merger, reportedly with the Cairo Amman Bank.
Tuqan stressed that the measure was intended to guarantee the stability of the kingdom’s banking system and to protect the public’s funds. He voiced a reassurance to depositors that their savings would be protected entirely in case of merger. Similar measures where taken by the CBJ towards Philadelphia Investment Bank.
JGB is one of three banks were involved in a lending scandal that surfaced in February 2002. The bank extended an 8.5 million Jordanian Dinar loan to Majd Sami Al-Shamaylih, without demanding adequate collateral. JGB filed a lawsuit against local businessman who fled the country, demanding to freeze his assets.
The affair dealt a serious blow to the bank as investor confidence diminished. JGB accumulated a total of JD19.70 million in losses in the past several years. Credit facilities extended by JGB in the first six months of 2002 showed a 17.84 percent decline, reaching JD230.47 million, as compared to JD280.5 million in the comparable period in 2001.
The bank’s deposits in the first nine months of 2002 totaled JD213.9 million, down 42.2 percent from 256.1 million the year before. Established as a public shareholding company in May 1977, JGB offers commercial banking services through its 22 branches and two working offices in Jordan and Palestine. — (menareport.com)
© 2003 Mena Report (www.menareport.com)