Economic reforms have placed Jordan on the path towards sustainable growth

Capital Bank announced record net profits for the first quarter of 2022, with an increase of 34.8% compared to its published profits for the same period last year, the highest quarterly profit since its establishment.

According to the preliminary financial results, the bank’s net profits in the first quarter of the year ending in March amounted to JD40.2 million, compared to JD29.8 million as per the financial results published for the same period last year. The bank’s net profits after excluding non-recurring items reached JD19.5 million, compared to JD10.2 million for the same period of 2021.

Capital Bank Group also witnessed a 38.6% increase in assets during the same period, reinforced by its acquisition of Société Générale Bank - Jordan, reaching JD6 billion, compared to JD4.3 billion by the end of 2021. The net credit facilities portfolio rose to JD2.9 billion by the end of March, compared to JD2 billion at the end of last year, a growth rate of 38%.

Customer deposits also recorded a remarkable 47.5% increase by the end of the first quarter of 2022, reaching JD4.1 billion, compared to JD2.8 billion at the end of 2021.

Commenting on the bank’s results, Chairman of Capital Bank Group Bassem Khalil Al-Salem said that the first quarter’s positive results were evident in most financial indicators, adding that the significant growth rates were achieved in profits without considering non-recurring items, which is a clear indication of the country’s economic recovery. Al-Salem stressed that the national economy has turned the page since the recession that affected it as a result of the coronavirus pandemic due to the efficient use of available financial and regulatory tools as well as the way that the country came together to overcome the challenges it faced with minimum losses. According to Al-Salem, the last two years should serve as a reminder of how strong the Jordanian economy is, as well as its resilience in the face of difficult economic conditions.

Al-Salem praised the long list of structural economic and financial reforms that have been implemented over the past years, adding that "they have paved the way to the achievement of sustainable and comprehensive economic development." He also noted that the reforms have been endorsed by international institutions, which have emphasized that those reforms have helped Jordan achieve sustainable growth and shrink the public debt to more moderate levels. Al-Salem indicated that there was a consensus among international institutions, particularly the International Monetary Fund (IMF), on the strength of the Jordanian monetary situation, adding that in a recent review by the IMF, the institution commended the country’s financial indicators, including the level of foreign reserves at the Central Bank. It also spoke of structural achievements, parts of which exceeded IMF expectations in terms of speed of completion.

Al-Salem said that the country’s economic situation should not be reduced to a specific number or an indicator but looked at “in depth and within an integrated holistic context without discounting the political stability that the country enjoys, as well as its well-established and solid governance foundations that oversee the work of institutions in Jordan that have clearly expressed themselves through their consolidated performances, which excelled during the coronavirus pandemic.” Al-Salem went on to add that the country’s political and economic stability has allowed Capital Bank to sign bilateral agreements with international institutions including the International Finance Corporation (IFC) and the investment arm of the French Development Agency (Proparco), which enabled the bank to issue perpetual bonds that were oversubscribed, a clear indication, according to Al-Salem, of the confidence placed both in Capital Bank as well as the Jordanian economy as a whole.  

National Bank of Iraq’s financial results also showed a record increase in net profits after taxes of 36%, or JD3.5 million in the first quarter of 2022, compared to JD2.6 million during the same period last year. Total assets increased to JD905 million, with a growth rate of 3% over last year.

The assets under management by Capital Investments reached US$550.4 million by the end of the first quarter of 2022, compared to US$425 million at the end of 2021, while the company achieved JD1.3 million in net profits during the same period.

Speaking about the exceptional first quarter of the year, Capital Bank Group CEO Dawod Al Ghoul said, “The strong financial results that were achieved reinforce Capital Bank’s ongoing strategy to continue improving its revenues and efficiently structuring its capital, especially after the issuance of the first-tier bonds. This is in addition to its successful management of its main operating activities as well as the development and quality of its assets, all of which were reflected in the return on shareholder equity, which reached 19%.”

In March, Capital Bank successfully issued perpetual bonds worth $100 million, which were listed on Dubai’s NASDAQ stock exchange, a first for a Jordanian bank. Furthermore, the bank acquired the operations and branches of Société Générale – Jordan, the second acquisition for Capital Bank in less than 12 months, after its acquisition last year of Bank Audi operations in Jordan and Iraq.

Al-Ghoul stressed that Capital Bank continues its remarkable progress in implementing its digital transformation strategy by providing its clients with the best electronic and digital services available globally. In February, the digital bank Blink was launched in record time, a clear reflection of Capital Bank’s commitment to keeping pace with the latest technological developments in the world of banking. In its first phase, Blink offers clients services that include digital onboarding, account opening, transferring funds, issuing virtual and physical debit and credit cards, as well as profile and user management.