Arab Bank, Jordan's biggest lender, reported a 20 per cent year-on-year jump in its first-half net profit amid a rise in operating income, as its chief executive announced his retirement by the end of this year.
Net profit after tax rose to $182.4 million in the first six months of the year, up from $152.1m during the same period in 2020, Arab Bank said in a statement on Saturday.
Despite the “negative economic consequences of the pandemic”, the bank's financial performance during the first half underscores its ability to operate in a challenging economic environment, with net operating income increasing 6 per cent to $579.8m, Nemeh Sabbagh, Arab Bank's chief executive, said.
Banks across the world have faced a tougher operating environment amid pandemic-driven headwinds that tipped the global economy into its worst recession since the 1930s. Historically low interest rates have also made it difficult to boost profits. However, the global economy has bounced back this year, easing pressure on lenders' profitability.
The half-yearly financial result underscores the “the strength of the bank’s diversified business model and the bank’s resilient performance in this challenging economic environment”, Sabih Masri, chairman of Arab Bank's board, said.
Arab Bank, which has more than 600 branches across five continents, grew its loan book by 27 per cent to $33.8 billion in the first half of the year, while its customer deposits rose 28 per cent to reach $46bn.
It attributed the growth in part to the consolidation of the financial statements of Oman Arab Bank under its accounts in the first quarter of 2021. The move “materially increased” customer deposits and loans by $7bn and $7.2bn respectively, it said.
The consolidation also increased total assets by $8.2bn to reach $63bn, compared with $51.6bn a year earlier. Oman Arab Bank has also recently finalised the acquisition of Al Izz Islamic Bank, an Islamic lender in Oman, to strengthen its presence in the sultanate.
Arab Bank said its loans-to-deposit ratio reached 73.5 per cent with equity of $10.3bn and a capital adequacy ratio of 16.7 per cent. Its credit provisions against non-performing loans remained in excess of 100 per cent.
Mr Sabbagh, who has led the bank as chief executive for the past 12 years, informed the board on July 29 about his intention to retire at the end of this year, the lender said.
He has recommended Arab Bank's deputy chief executive Randa Sadik, a position she has held since 2010, to be become his successor, according to the statement.