AMMAN: Jordan’s largest lender, Arab Bank Group, said its 2018 net profit jumped 54 per cent to $820.5 million (Dh3.01billion) after it transferred in $325 million in surplus provisions it had set aside during a major legal case that it eventually won last year.
Operational profit rose 8 per cent, the bank said in a statement on Saturday. Total deposits rose to $34.3 billion compared with $33.8 billion in the same period the previous year.
Credit facilities increased by 3 per cent to $25.8 billion, the statement said.
A US appeals court last year threw out a 2014 jury verdict that found Arab Bank liable for knowingly supporting militant attacks in Israel linked to Hamas, in a decision that triggered a settlement agreement with hundreds of plaintiffs.
The ruling ended more than 13 years of litigation over Arab Bank’s liability for 24 attacks in and around Israel in the early 2000s. The lender disputed the claims.
CEO Nemeh Sabbagh said with the case now finalised the bank was able to include in its 2018 profits $325 million in surplus provisions set by for the case.
The bank also said that it put aside $225 million in provisions for investments in Turkey due to currency depreciation.
The bank, which has assets that stood at over $47 billion last year, operates in 30 countries on five continents, and it owns 40 per cent of Saudi Arabia’s Arab National Bank ANB.
Chairman Sabih Al Masri said the bank’s diversified operations and geographic spread enabled it to “deal with a challenging regional and international” banking environment.
CEO Nemeh Sabbagh said its liquidity remained strong with a loan-to-deposit ratio of 75 per cent. The bank’s provisions coverage ratio for non-performing loans stood in excess of 100 per cent.
It’s capital adequacy ratio rose to 15.6 per cent.
“The 2018 results were driven by sustainable growth in the underlying business, spread improvements and well-controlled expenses,” Sabbagh said, adding that its return on equity reached 9.5 per cent.
The statement said the bank’s board of directors recommended the distribution of a 45 per cent cash dividend on its 2018 results.