Taking advantage of these opportunities, the Jordan Commercial Bank (JCBank), led by Dr. Jawad Hadid, Chief Executive Officer and General Manager of the bank, succeeded in both sustaining a balanced growth of core business and in increasing its market share. This was a time of radical change for the bank, which continued efforts to upgrade and transform all aspects of its operation, as well as promoting its image and institutionalizing the decision-making processes. The bank was thus able to successfully take its core business to the next level by broadening products and reaching a balance between optimizing profitability, managing risk and maintaining liquidity. These achievements were accompanied by enhanced quality, improved services and increased efficiency.
“Since risk management is integral to operating a bank, efforts were made to enhance control, improve asset liability management, and effectively administer operating and credit risks,” explained Dr. Hadid. This required the creation of an independent department, in compliance with Basel II recommendations (a set of recommendations relating to banking credit facilities), responsible for controlling key risk factors and the overall banking environment.
JCBank continued it positive growth in various activities, products and services, as well as supporting its competitive positive in the Jordanian banking sector. In support of the banks strength and capabilities in the retail banking services sector, JCBank’s strategy in 2006 and 2007 focused on ensuring and developing a wide variety of integrated products and services in line with the versatile and increasing needs of its customers.
Meanwhile, with the bank’s corporate strategy of enhancing economic and social development in Jordan, JCBank continued its commitment to financing the needs of large corporations and small to medium size enterprises. The bank maintained a good quality credit portfolio by focusing on promising sectors and implementing professional credit benchmark guidelines that ensure profitability at lower risk.
During 2006, the bank implemented a strategic branch expansion policy in Jordan and in the Palestinian National Authority areas. In Jordan, the total number of branches has reached 26, in addition to 3 branches in the Palestinian National Authority area.
Main Financial Results
Balanced growth and satisfactory results during 2006 helped strengthen the bank’s position in the financial sector. JCBank’s main financial results are summarized as follows:
1. Total assets reached JD513.2 million at the end of 2006, marking a 41.3% increase over 2005, when total assets reached JD363.1 million. This growth rate is believed to be the highest for 2006 among banks operating in Jordan.
2. Shareholders’ equity continued to grow through capitalization of profits and increase in reserves. The bank’s equity grew by 12.9% to reach JD75.5 million at the end of 2006 from JD66 ,8 million in the previous year. Part of shareholders’ equity enhancement was achieved by capitalizing JD7.5 million from reserves.
3. Customer deposits grew by 42% during 2006 to reach JD341.6 million, compared to JD240.7 million at the end of 2005. This rate of increase in customer deposits is considered the highest in the sector and the achievement was due to the implementation of innovative marketing strategies and the introduction of unique products.
4. The bank consistently contributed to the development of the national economy by responding to the financing needs of small, medium and large companies operating in the country. JCBank positioned itself in the corporate and retail markets by offering timely banking products. Consequently, the bank topped the sector’s average growth rate of 26.1%, growing by 37.8%. Total booked loans and credit facilities increased by JD74.8 million at the end 2006, reaching JD272.5; they were JD197.7 million at the end of 2005.
5. Operating revenues, excluding income from tradable and available for sale securities, grew by 53.6% to reach JD24.1 million at the end of 2006, compared to JD15.7 million at the end of 2005. Growth resulted from a significant increase in core business revenues.
6. The bank recorded a JD10.7 million net profit after tax. Overall, net profit after tax experienced a slight decline at the end of 2006 relative to 2005 as a result of the weak ASE market performance. Nonetheless, the bank generated JD13 million from operating core business during 2006, compared to JD0.915 million during 2005.
2007 Strategic outlook
During 2007 the bank will focus on increasing its core business revenues, achieving high rates of growth in all aspects of its business along with introducing new products and services that meets customer’s demand and market expectations. “These are some of the major ingredients of a successful bank,” emphasized Dr. Hadid. “Moreover, investing in the bank’s employees and new technology are two major factors that support these ingredients.”
Looking towards the future with anticipation and a clear strategic outlook, JCBank is on its way to reaching high levels of success and to being more capable of meeting its customer’s expectations and maintaining its competitive advantage throughout the banking sector in Jordan and within the accelerated growth within the banking industry.