Arab Bank, the largest lender in Jordan, posted a 7 per cent year-on-year rise in net profit for the first nine months of 2018, and said it plans to open its first branch in China at the start of 2019.
Net profit for the period ending September 30 rose to $643 million, while net income reached $865m, an 8 per cent increase on the year-earlier period, the lender said in a statement to media on Saturday.
The branch opening in Shanghai is intended to “finance the increasing trade and commercial links between China and the Arab world”, the statement said.
The full financial statements will be posted to the Amman Stock Exchange, where the bank’s shares are traded. The net profit rise was driven by “core banking income generated from interest and fees coupled with effective cost management”, said Nemeh Sabbagh, the chief executive of Arab Bank.
Net operating income grew by 9 per cent and net interest income rose by 11 per cent, due to yield improvement and the effective management of the cost of funds, the chief executive said. Total loans for the period reached $25.4bn, while customer deposits reached $33.2bn.
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“The bank’s main lines of business – corporate banking, consumer and private banking, and treasury – performed well despite challenging conditions, benefitting from clear business focus and the bank’s strong platform in its home market and the extensive network regionally and globally,” Mr Sabbagh added.
The group’s core revenues are diversified across Jordan, the GCC, Levant and North Africa, in addition to international operations, including plans to open its first Chinese branch in Shanghai in early 2019 pending regulatory approvals, the statement on Saturday said.
Healthy returns in recent years have been understated by one-off year-end provisions relating to New York legal cases, which were finalised early this year, the bank said. There are no legal provisions to be booked in the fourth quarter of this year, and the group is “on a clear path to deliver sustainable growth”.