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Middle EastFebruary 1 2010

M&A shake-up looms in Jordan

Arab Bank: boasts the largest branch network in JordanThe impact of the global downturn and tighter regulations imposed by Jordan's central bank looks set to change the future shape of the country's banking sector. Writer Stephen Timewell
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M&A shake-up looms in Jordan

In recent years, a strong real estate market and booming economy have helped Jordan's banking sector achieve record growth levels, with total assets soaring from Jd12.9bn ($18.21bn) in 2000 to Jd29.8bn in 2008. The global financial crisis, however, has changed that rosy picture. While the sector has been protected from the negative excesses experienced elsewhere by prudent central bank management and heavy regulation, Jordan's domestic banks now face some serious new challenges.

While all of Jordan's banks did well in boom times, the crisis has made it uncomfortably clear that the smaller family-owned banks face troubling questions about their future. With the Central Bank of Jordan wanting to double the minimum capital requirement for banks to Jd200m or more, and bring in larger regional banks, the banking landscape looks set to change and become increasingly competitive. Shunned in the past, mergers and acquisitions look set to take place in 2010.

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