Al Salem: Capital Bank Group reinforced its competitive advantage in 2020 through its expansion strategy  

Capital Bank held its regular annual General Assembly Meeting on (15/04/2021) — an event that took place virtually in accordance with Defense Law No. (13) of 1992, Defense Order No. (5) of 2020, and the guidelines issued by His Excellency the Minister of Industry, Trade and Supply on 04/09/2020.

The meeting was headed by Bassem Khalil Al-Salem, Chairman of the Board of Directors, and in the presence of several members of the Board of Directors, Capital Bank’s CEO, Dawod Al Ghoul, and shareholders who represent (84.85%) of the bank’s capital. The meeting was also attended by the Companies Controller Wael Armouti and the representative of the bank’s audit team.

The General Assembly approved the recommendations issued by the Board of Directors to distribute cash dividends to shareholders at a rate of 12 percent of the bank’s capital, with a total of JOD 24 million. It also approved the Board ‘s report and the bank’s financial statements for the year 2020, as well as its announced future plans.

The Chairman of Capital Bank, Bassem Khalil Al-Salem, said that “the bank registered strong financial performance during the past year despite the exceptional circumstances that the world witnessed due to COVID-19, which significantly exacerbated the economic slowdowns already observed since 2019. This also coincided with general economic slowdown that brought the worst growth indicators since the global financial crisis.”

Despite the above challenges, Al-Salem noted that Capital Bank recorded a 5 percent growth in its net profits for 2020, which totaled JOD 30.3 million compared to JOD 28.8 million in 2019. That growth came despite the JOD 24.5 million in provisions the bank had allocated as part of its hedging strategy in 2020, compared to just JOD 7 million in 2019.

Capital Bank also registered a 40 percent year-on-year increase in net operating profits and grew in its total assets from JOD 2.2 billion in 2019 to JOD 2.8 billion in 2020, translating to a 26 percent increase. Notable growth was also achieved in revenue streams, particularly customer deposits, which grew by about JOD 368.2 million, or 28.2 percent. Meanwhile, the bank’s net credit facilities portfolio grew by JOD 324 million, or 30 percent, while net interest income grew by 25.8%, by JOD 14.2 million. Shareholders equity also rose by 2.4 percent, from JOD 348 million in 2019 to JOD 356 million in 2020.

In his remarks to the General Assembly, Al-Salem reviewed the key achievements made in 2020, which helped to reinforce the bank’s position in the local market. He noted that Capital Bank Group had initiated procedures for the acquisition of Bank Audi in Jordan and Iraq, which were completed in March of this year. The acquisition, the first in the group’s history, contributed to expanding its reach locally and regionally as well as to its ambitious long-term business development prospects. Al-Salem also underscored the importance of this acquisition to the National Bank of Iraq (NBI), a key subsidiary of Capital Bank Group in Iraq, allowing NBI to continue providing innovative solutions to personal and corporate customers in the fast-growing Iraqi market while further contributing to the group’s financial growth.

Capital Bank CEO Dawod Al-Ghoul noted that this impressive growth is the result of the strategic expansion policy that the bank had adopted over the past several years, which prioritizes capital growth while staving off risks. The acquisition of Bank Audi has also expanded Capital Bank’s footprint to in Jordan to 28 branches, while NBI’s network grew to 18 branches. The acquisition also raised the group’s shareholder equity to nearly JOD 400 million and its assets to JOD 3.5 billion. Al-Ghoul added that the group’s expansion plans included raising the rating for Capital Investments, the group’s investment arm, in the Dubai International Financial Centre to enable it to provide asset management services to its growing client base in the UAE and the Gulf.

Al-Ghoul also announced that Capital Bank Group had updated its five-year strategic plan (2021-2026) to cope with the challenges posed by COVID-19, which showed the importance of preparedness for remote operations and serving clients through social media channels and interactive teller machines (ITMs). He added that, over the past year, the group completed many automation projects and updates to the systems used for its treasury, loan management, and core banking system, which also saw the bank launching a number of new digital services such as the iCa Chatbot, available on WhatsApp and Facebook Messenger, and a partnership agreement with Liwa Company to automate loan applications for small and medium enterprises.

Capital Bank also continued to support various national sectors and institutions impacted by COVID-19, delivering donations valued at JOD 2.5 million over the course of 2020. The bank also launched several incentives for its corporate and retail clients to help ease their financial burdens and support the economic sectors, in addition to participating in the National Loan Guarantee Program initiative launched by the Central Bank of Jordan, and acquiring a EUR 70 million fund from the European Investment Bank to fund small and medium businesses impacted by the pandemic.