Arab Bank Group reported net income after tax of $ 215.2 million for the nine months of 2020 as compared to $668.9 million for the prior period, recording a drop of 68%.

The fall in the profits is attributable to the build up of higher provisions, driven by current and forecasted economic conditions, and reflects the deterioration in the macro-economic environment in the region and globally, and to lower revenues from interest and fee income because of the impact of the Covid-19 outbreak and lower market interest rates and weakening oil prices.

Group net operating income is at $ 808 million, recording a drop of 22% from prior period as a result of a decrease in net interest and commission income, in addition to a drop in the profits of the bank’s associates in the Gulf.  Customer deposits grew by 8% to reach $ 37.5 billion as compared to $ 34.7 billion, while loans grew by 2% to reach $26.7 billion as compared $ 26.1 billion. The Group maintained its strong and robust capital base with equity of $9.3 billion and with a capital adequacy ratio of 16.7% calculated in accordance with Basel III regulations. The Group enjoys high liquidity with a loan-to-deposit ratio of 71.1%, while credit provisions held against non-performing loans continue to exceed 100%.
 
Mr. Sabih Masri, Chairman of the Board of Directors remarked that the pandemic has had, and continues to have, a significant impact on businesses around the world.

Mr. Sabbagh, Chief Executive Officer, stated that the global and regional banking sectors will continue to face challenges because of the economic contraction, the higher cost of risk, and lower interest rates. He added that growth in the GCC countries has also declined sharply due to the plunge in oil prices.

Mr. Sabbagh highlighted that the increased provisions booked across the Group are in accordance with the guidelines of International Financial Reporting Standard # 9, and as per the bank’s internal expected credit loss model, and include general provisions built due to the current economic situation in Lebanon.

Mr. Masri concluded by stating that the pandemic has negatively affected the performance of banks throughout the region and globally, and affirmed that Arab Bank Group will continue to maintain its strong and resilient financial position.

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.