|Arab Bank remains leader despite regional speculations
|DESPITE THE mounting challenges facing international financial markets today, the Arab Bank remains in the front seat.|
DESPITE THE mounting challenges facing international financial markets today, the Arab Bank remains in the front seat. With a 6.6 increase in its budget to $28.85 million in March, the Arab Bank is even more determined to sustain its economic reach globally.
However, the rapid developments earlier this week in the Bank’s shares at the Amman Stock Exchange (ASE) have created much reaction among shareholders and business people. While bankers believe these dealings are part of run-of-the-mill “usual transactions”, businessmen agree that more and more foreign investors are interested in the shares of the bank.
The selling, Sunday, of 100,000 shares by the Kuwaiti-Gulf Bank to the Social Security Corp. (SSC) at JD 16.7 million pushed the trading volume upwards at the ASE floor to JD 19.5 million, the highest in more than two years. The transaction, on the other hand, has nothing to do with the Kuwaiti government’s portion of the Arab Bank’s capital, estimated at 5 percent of its 8.8 million shares.
The deal came in response to earlier speculations that followed the recent visit of a delegation from the Kuwaiti Investment Board to the Kingdom 10 days ago. The delegation held talks with their Jordanian counterparts on ways to boost mutual projects.
The visit came at a moment when there was talk that Rafiq Al Hariri, the Lebanese prime minister and businessman, was becoming interested in acquiring an even bigger share in the Arab Bank. And hence there was speculation that if this happened, the controlling interest will no longer be in Jordan. Arab Bank’s sources assured earlier the ASE dealings are part of usual market tradings and has nothing to do with the bank’s financial standing, which remains strong. The sources denied rumors suggesting the Kuwaiti government is intending to sell its shareholdings at the bank.
Arab Bank’s capital is shared among Arab governments and private investors. According to ASE’s records, Arab Bank’s owners are the Shoman family, who holds 18 percent, Saudi government at 17 percent and Al Hariri at 12 percent. The remaining 48 percent is divided between the SSC and Arab investors, including Jordanians and Kuwaitis.
“I believe any kind of wrong and misleading speculation about the future of the Arab Bank will badly affect the bank and its clients,” said Ziad Al Basha, a financial expert.
He told The Star the Arab Bank is doing a good job and its policy is much appreciated among investors. “For the past three weeks, the Arab Bank’s share was fortified through upward trading, and this week’s selling of 100,000 shares helped the bank to raise its stock price at ASE, something that revived the overall trading at the market.” Indeed, the ASE daily newsletter shows the Arab Bank share price closed, Tuesday, at JD 170, a three-dinar rise over last week. Al Basha made clear the appointment of Abdel Hamid Abdel Majeed Shoman recently as Arab Bank’s vice-chairman and director-general supports its financial and banking strategies. He called the appointment part of a “succession policy that serves the bank’s positive outcomes”.
“It is clear the bank is doing its best to substantiate its position as the biggest financial institution in the Arab world. And this can be done by pumping new blood into its administration and management policies,” the expert explained.
With more than 70 years in business, the Arab Bank still aims to maintain its financial power by developing its services. One of its goals, meanwhile, is to keep its financial standings in an upward mode. It increased its profits by 17.69 percent in the first quarter of this year to $83.34 million, while its deposits made $18.23 million. The bank’s revenues from interest rates and commissions this year were close to the $200 million mark.
“All these indications reveal strong confidence among members of the bank’s administration,” the expert concluded.