Nemeh Sabbagh
Q: What is the outlook for 2019 and 2020 in terms of Arab Bank’s net profit and credit growth?
A: The bank has managed to grow its business and profitability under varying regional circumstances, while providing excellent service to customers and delivering steady returns to shareholders. Overall, Arab Bank Group continues to enjoy strong liquidity and robust capitalisation.
During the coming period, we will remain focused on delivering solid organic growth in our profits, driven primarily by our core revenues and prudent management of our cost base. Our net income before tax for June 2019 grew by 5% compared to the previous [half-year] period. We expect to continue on our strong underlying profits path in 2020.
On the credit side, in spite of the slowdown in economic growth and subdued demand for credit in some markets across the region, our loan book has grown by 2% during the first six months of 2019, and by 3% compared with the same period in 2018. We do hope to see stronger growth rate in the bank’s loan book when the overall demand for credit in the region improves. Arab Bank has managed to maintain the quality of its credit portfolio over the past years with stable non-performing loans and a provisions coverage ratio in excess of 100%.
Q: What are the key growth markets for Arab Bank likely to be in the coming two years? Where are the main challenges likely to come from?
A: We expect to continue growing in corporate banking and trade finance, along with continuing the recent strong growth in the consumer banking business line, while implementing an ambitious digital transformation strategy. We also remain focused on delivering comprehensive financial solutions to small and medium-sized enterprises in key markets in partnership with central banks and multilateral financial institutions.
Furthermore, Arab Bank continues to play a leading role in financing renewable energy projects, which are rapidly expanding across the region.
The main challenges we face arise from the fact that some countries in the region face subdued economic conditions and unsettled operating environments, conditions that are challenging for all banks operating in the region. Arab Bank’s strong diversification across countries and product lines, along with our strong knowledge and deep roots in the region, will allow us to continue growing and achieve sustainable increases in profitability and return on equity.
Q: What is the outlook for operations in Jordan, where Arab Bank is the market leader? Can the bank maintain steady growth amid the country's economic uncertainties?
A: While Jordan continues to face several economic challenges – as do other countries in the region – the country has been resilient in dealing with these challenges, turning a number of them into opportunities. I believe the prospects of our operations in Jordan remain promising despite the current market conditions. We have always been able to seize viable opportunities across all sectors in Jordan, capitalising on our long-standing relationships and well-diversified value propositions.
Q: Arab Bank recently launched Arabi MobiCash and Arabi Mobile in Jordan. What digital product launches can we expect in the near future? What is the impact of increased digitisation in Jordan and across your footprint?
A: More and more, consumers in the Middle East and north Africa region are getting used to 'frictionless digital' experiences, given the growing number of apps that they download on their phones to connect socially and to buy goods and services digitally.
Arabi Mobile is a good example, where in a single app we managed to provide a seamless customer journey for every individual’s day-to-day banking activities, from checking balances and transactions history to making various types of payments and requesting specific services. We recently added our online customer onboarding on Arabi Mobile, allowing customers to open their bank accounts from their mobile or tablet. Arabi MobiCash is another example where we provide a frictionless payment experience on mobile to pay for goods and services either at the till or from home when ordering online, without the need to carry a debit or credit card.
Our next digital solutions will come as a result of improved customer journeys that have gone through proper design thinking and process optimisation. They will naturally relate to areas where customers want to see more digitalisation, such as customer onboarding and product applications, but also relevant services that help our customers to better manage their finances and accommodate their different banking needs.
