jordanian banking sector brief - awraq · pdf file2 brief source: central bank of jordan banks...

1

Jordanian Banking Sector Brief

Amman, October 2nd , 2013Report prepared by:

Feras H. MusmarSenior Research Analyst

Awraq Investments [email protected]

Sa’ad M. HudairiResearch Analyst

Awraq Investments [email protected]

mailto:[email protected]


2

Brief

Source: Central Bank of Jordan

Banks in Jordan

The banking sector in Jordan – as in many countries – is considered one of the main pillars of theJordanian economy. In spite of the plethora of events that have been taking place since the beginningof the year 2011 following the Arab spring, the well-capitalized and highly regulated banking sectorproved resilient, maintaining its expansion and growth during the first half of 2013.

The sector currently consists of 26 bank, 15 of them are listed on the Amman Stock Exchange (ASE).In this report we cover the 15 listed banks, looking at their performance up to the first half of 2013and discussing each bank’s financial highlights in addition to any extra-ordinary events those bankswitnessed during the year.

Bank Name Ticker Origin TypeArab Bank ARBK National CommercialArab Banking Corporation ABCO National CommercialArab Jordan Investment Bank AJIB National CommercialBank Al Etihad UBSI National CommercialBank of Jordan BOJX National CommercialCairo Amman Bank CABK National CommercialCapital Bank of Jordan EXFB National CommercialInvestbank INVB National CommercialJordan Ahli Bank AHLI National CommercialJordan Commercial Bank JCBK National CommercialJordan Kuwait Bank JOKB National CommercialSociete Generale de Banque Jordanie SGBJ National CommercialThe Housing Bank for Trade and Finance THBK National CommercialJordan Islamic Bank JOIB National IslamicJordan Dubai Islamic Bank JDIB National IslamicIslamic International Arab Bank Not listed National IslamicBanque Audi Not listed Foreign CommercialBlom Bank Not listed Foreign CommercialCitiBank Not listed Foreign CommercialEgyptian Arab Land Bank Not listed Foreign CommercialHSBC Bank Middle East Not listed Foreign CommercialNational Bank of Abu Dhabi Not listed Foreign CommercialNational Bank of Kuwait Not listed Foreign CommercialRafidain Bank Not listed Foreign CommercialStandard Chartered Not listed Foreign CommercialAl Rajhi Bank Not listed Foreign Islamic

source: ASE, Bloomberg , Bank’s Financials3

Net Profit Growth

Out of the 15 listed Jordanian banks, 11 recorded an increase in net income during the first half of2013, two of them have more than doubled their net income, while some reported growth ratesabove 25%. All of the banks have been profitable during the first half 2013, ARBK and THBKcontinued to report the largest net income of JOD 208.28 million and JOD 52.5 million respectively.While UBSI, JCBK and SGBJ were the banks that witnessed the highest growth in net income at113.7%, 505.2% and 81.8% respectively.

Source: ASE, Bloomberg, Bank’s Financials

Net Profit Growth

Net Income – FY 2011/ FY 2012 Net Income – H1 2012/ H1 2013

source: ASE, Bloomberg , Bank’s Financials

TickerNet Income

2011Net Income

2012Growth

2012Net Income

H1 2012Net Income

H1 2013Growth H1 2013

JOD (mil) JOD (mil) % JOD (mil) JOD (mil) %ARBK 263.00 261.34 -0.6% 197.30 208.28 5.6%THBK 100.00 104.49 4.5% 51.17 52.50 2.6%JOIB 28.30 36.40 28.6% 19.03 24.68 29.7%BOJX 36.57 33.19 -9.2% 17.86 16.77 -6.1%JOKB 39.70 46.61 17.4% 25.64 26.64 3.9%CABK 36.60 35.29 -3.6% 16.59 17.44 5.1%AHLI 23.24 24.60 5.9% 12.11 11.03 -8.9%EXFB 1.43 22.04 1441.0% 13.36 18.07 35.3%UBSI 10.33 14.75 42.8% 4.75 10.15 113.7%AJIB 11.91 15.00 25.9% 8.22 8.56 4.1%INVB 9.60 11.25 17.2% 10.05 7.33 -27.1%ABCO 11.30 11.03 -2.4% 5.40 6.16 14.1%JDIB 5.35 2.13 -60.2% 1.22 0.83 -32.0%JCBK -1.34 2.06 -253.7% 0.77 4.66 505.2%SGBJ 3.26 4.73 45.1% 1.76 3.20 81.8%

-50

0

50

100

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AR

BK

TH

BK

JOIB

BO

JXJO

KB

CA

BK

AH

LIE

XFB

UB

SIA

JIB

INV

BA

BC

OJD

IBJC

BK

SGB

J

Net Income 2011Net Income 2012

0

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AR

BK

TH

BK

JOIB

BO

JX

JOK

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AB

CO

JDIB

JCB

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SGB

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Net Income H1 2012Net Income H1 2013

Banking Sector ReportOctober 2nd , 2013



CABK

4

Brief

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

10.00%

0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00%

AJIB

ABCOEXFB

AHLI

ARBK

THBK

JOKB

BOJX

JOIB

Payout Ratio

Div

iden

d Y

ield

INVBUBSI

Cash Dividend

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

45.00%

50.00%

AR

BK

AB

CO

AJI

B

UB

SI

BO

JX

CA

BK

EX

FB

INV

B

AH

LI

JCB

K

JOK

B

SGB

J

TH

BK

JOIB

JDIB

Capital Adequacy


5

Interest Income

Except for BOJX – which has been effected by the Syrian crisis and witnessed sluggish growth sincethe beginning of the year – all of the banks have reported growth in their interest income during H12013. AHLI was able to increase its interest income by 11.90% to reach JOD 76.09 million duringH1 2013, making it the third largest bank in terms of interest income. Among the highest growthrates were SGBJ and JDIB where growth in their interest income amounted to 54.1% and 35.0%respectively.Interest Income

TickerInterest

Income 2011Interest

Income 2012Growth

2012

Interest Income H1

2012

Interest Income H1

2013

Growth H1 2013

JOD (mil) JOD (mil) % JOD (mil) JOD (mil) %ARBK 847.33 954.61 12.7% 465.16 499.04 7.3%THBK 292.42 336.44 15.1% 162.54 175.6 8.0%JOIB 85.91 115.46 34.4% 53.82 67.92 26.2%BOJX 111.18 120.48 8.4% 59.98 58.16 -3.0%JOKB 119.77 127.87 6.8% 61.71 70.16 13.7%CABK 111.44 124.99 12.2% 60.1 72.54 20.7%AHLI 126.67 140.46 10.9% 67.97 76.09 11.9%EXFB 70.57 81.55 15.6% 37.57 48.71 29.7%UBSI 73.97 79.23 7.1% 37.82 47.19 24.8%AJIB 43.98 54.67 24.3% 25.89 28.73 11.0%INVB 41.46 45.59 10.0% 24.87 30.27 21.7%ABCO 39.98 52.82 32.1% 11.79 14.81 25.6%JDIB 8.83 14.07 59.3% 6.42 8.67 35.0%JCBK 42.73 45.61 6.7% 22.17 26.28 18.5%SGBJ 18.03 22.62 25.5% 9.88 15.23 54.1%


-10.00%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

AR

BK

TH

BK

JOIB

BO

JX

JOK

B

CA

BK

AH

LI

EX

FB

UB

SI

AJI

B

INV

B

AB

CO

JDIB

JCB

K

SGB

J

Growth 2012

H1-13 YoY Growth

Interest Income Growth Figure



6

Commission Income

The banks witnessed a mixed performance in their commission income where several bankswitnessed substantial drops in their income from commissions while others witnessed growth. Thehighest commission income earned during H1 2013 was recorded by ARBK, THBK and JOIB wheretheir commission income amounted to JOD 79.39 million, JOD 16.66 million and JOD 12.30million respectively.Commission Income


Commission Income Figures

-2.00 4.00 6.00 8.00

10.00 12.00 14.00 16.00 18.00 20.00

TH

BK

JOIB

BO

JX

JOK

B

CA

BK

AH

LI

EX

FB

UB

SI

AJI

B

INV

B

AB

CO

JDIB

JCB

K

SGB

J

H1 2012

H1 2013

-

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

TH

BK

JOIB

BO

JX

JOK

B

CA

BK

AH

LI

EX

FB

UB

SI

AJI

B

INV

B

AB

CO

JDIB

JCB

K

SGB

J

FY 2011

FY 2012



Ticker 2011 2012 y/y H1 2012 H1 2013 y/y JOD (Mil) JOD (Mil) % JOD (Mil) JOD (Mil) %

ARBK 154.40 151.23 -2.05% 75.68 79.39 4.90%THBK 35.09 33.39 -4.84% 17.47 16.66 -4.64%JOIB 16.27 20.88 28.33% 10.18 12.30 20.83%BOJX 16.30 17.32 6.26% 8.67 7.93 -8.54%JOKB 9.09 10.66 17.27% 4.93 5.75 16.63%CABK 19.86 19.34 -2.62% 10.12 9.43 -6.82%AHLI 20.51 20.87 1.76% 10.96 9.62 -12.23%EXFB 14.68 32.21 119.39% 17.10 11.67 -31.75%UBSI 10.90 12.71 16.61% 6.18 6.14 -0.65%AJIB 4.40 4.48 1.87% 2.22 2.22 0.00%INVB 4.31 4.92 14.15% 2.44 2.77 13.52%ABCO 2.79 2.74 -1.79% 1.74 1.24 -28.74%JDIB 4.01 6.71 67.33% 2.85 5.28 85.26%JCBK 5.07 5.33 5.13% 2.59 2.79 7.72%SGBJ 2.16 2.23 3.24% 1.53 0.97 -36.60%

7

Loans and Deposits

Most of the listed banks witnessed an increase in credit facilities and deposits during the first half of2013. AJIB had the highest growth rate where its credit facilities grew by 15.76% and reached JOD398.06 million compared to JOD 331.10 million during the first six months of 2013.

-

2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00

2011

2012

H1 2013

Deposits growth varied acrossdifferent banks, but most ofthe banks reported increases indeposits.

ABCO and SGBJ recorded anincrease of 12.68% and11.95% respectively, followedby JDIB which grew by10.12%.

INVB witnessed a substantialdrop in its deposits whichdropped 7.68% during theperiod. While, BOJX had avery slight decrease of 0.24%in deposits during sameperiod.

Net Credit Facilities Figure


Loans and Deposits Growth


TickerLoans Growth Deposits Growth

Loans To Deposits (%)

y/y (%) YTD (%) y/y (%) YTD (%) FY 2012 H1 2013

ARBK -0.66% 4.29% 3.35% 1.11% 62.77% 64.66%THBK 7.27% -3.79% -3.47% 1.58% 58.96% 56.95%JOIB 62.21% 3.24% 6.99% 6.06% 235.90% 227.95%BOJX -11.07% -2.47% 2.33% -0.24% 61.19% 61.75%JOKB 13.42% -9.29% 0.81% 3.65% 91.68% 86.78%CABK 6.31% -0.56% 1.39% 3.40% 70.98% 71.16%AHLI 8.21% 2.83% 5.80% 1.21% 71.41% 70.59%EXFB -4.96% 1.68% 9.04% 6.67% 65.32% 62.71%UBSI 15.58% 8.33% 16.20% 5.76% 70.65% 75.21%AJIB -0.33% 15.76% 4.82% 1.75% 69.87% 67.58%INVB 15.51% 4.11% 14.15% -7.68% 74.69% 83.75%ABCO 17.33% 5.14% 1.18% 12.68% 94.67% 88.45%JDIB 34.66% -21.17% 75.80% 10.12% 373.04% 282.12%JCBK 4.81% 13.18% 4.13% 9.91% 72.64% 74.32%SGBJ 26.14% 5.29% 26.81% 11.95% 59.56% 55.42%


Price as of 30th of September, 2013

8

Arab Bank(ARBK)

(JOD) Closing Price 7.0052-Week Range 6.50 - 8.04Average Traded Volume 356,865Free Float (%) 44.39%P/E ( Annualized) 8.97P/BV 0.96Capital 534,000,000Market Cap 3,738,000,000Dividend Yield (%) 4.29%

5.00

5.50

6.00

6.50

7.00

7.50

8.00

8.50

9.00

The Arab Bank reported decent results in H1 2013, as the bankwitnessed growth in its core operations and profitability. Netincome saw an increase by 5.57% and amounted to JOD 208.28million, which was bolstered by the increase in interest income inwhich hiked by 7.28% to reach JOD 499.04 million, whilecommission income also increased by 5%.

70%

5%

15%

3%

2%

Large Corps (Mil)SMEs (Mil)Retail (Mil)Mortgages (Mil)Government (Mil)

Source: Bank’s Financials H1 2013

55%

31%14%

Saving and Term deposits (Mil)Other deposits (Mil)Cash Margins (Mil)



Deposits Structure

Loans Structure

Profitability figures

Stock Highlights


2011 2012H1

2012H1

2013Growth

Interest Income (Mil) 847.33 954.61 465.16 499.04 7.28%Commission income (Mil) 154.40 151.23 75.68 79.39 4.9%Net Income (Mil) 263.00 261.34 197.3 208.28 5.57%EPS 0.49 0.49 0.37 0.39 5.41%ROE % 6.90% 6.74% 5.13% 5.42% N/AROA % 1.10% 1.09% 0.82% 0.87% N/A

Arab Bank is one of the largest financial institutions inthe Middle East, founded in 1930 as the first private sectorfinancial institution in the Arab world. Headquartered today inAmman, Jordan, it serves clients in more than 600 branches in 30countries on five continents. The bank is a major economicengine in Jordan and throughout the Middle East/NorthernAfrica, providing modern banking services and capital, andfacilitating development and trade throughout the region. Thebank has the highest market capitalization of all companies listedand represents 28% of the Amman Stock Exchange.

The bank has made changes in the composition of its loan portfolio structure, as mortgage loansdropped by 37% and amounted to JOD 193.27 million in H1 2013, while facilities granted toSME’s rose by 16.30% to stand at JOD 808.88 million in the same period, which was resulted in theincrease of the net credit facilities by 4.3% amounting to JOD 10,363 million. Loan to deposits ratiowent up to 64.66%, while the bank’s NPL coverage ratio (which has slightly dropped) remainedaround its normal levels, at 75.18%.

The bank was consistent in paying cash dividends around the range of 20% - 30% of paid up capitalduring the past five years, noting that the bank has distributed 30% for the year 2012 due toimproved operations and expected increase in future profitability. The first half of 2013 showedpromising results which makes us believe that the bank will be able to distribute good dividends thisyear as well.

Key Performance Indicators

9


2010 2011 FY 2012 H1 2013 GrowthTotal Assets (Mil) 23319.41 23921.49 23912.42 24174.83 1.10%Total Equity (Mil) 3786.60 3813.52 3875.51 3883.91 0.22%Capital (Mil) 534.00 534.00 534.00 534.00 0.00%DepositsSaving and Term deposits (Mil) 9898.13 9975.50 9671.73 9573.80 -1.01%Other deposits (Mil) 4099.53 4706.52 5244.13 5483.93 4.57%Cash Margins (Mil) 358.16 2021.69 2347.00 2396.63 2.11%Total deposits (Mil) 14355.81 16703.72 17262.86 17454.36 1.11%Total Investments (Mil) 2533.63 2512.21 2172.54 2300.15 5.87%Due to Banks (Mil) 3906.06 4615.57 4682.66 5014.55 7.09%Loans Large Corps (Mil) 7270.71 7558.91 7536.05 7926.64 5.18%SMEs (Mil) 707.29 713.27 695.51 808.88 16.30%Retail (Mil) 1432.64 1478.95 1589.02 1675.85 5.46%Mortgages (Mil) 496.56 282.18 309.07 193.27 -37.47%Government (Mil) 779.53 699.35 706.09 681.74 -3.45%Total Loans (Mil) 10686.73 10732.66 10835.74 11286.38 4.16%Net Credit Facilities (Mil) 10061.71 10003.55 9937.60 10363.73 4.29%Loans / Deposits Ratio % 74.44% 64.25% 62.77% 64.66% N/ANon Performing Loans (Mil) 834.40 832.00 923.50 943.60 2.18%Loans Provisions (Mil) 605.24 578.69 703.56 709.36 0.82%NPL Ratio % 7.81% 7.75% 8.52% 8.36% N/ANPL Coverage Ratio % 72.54% 69.55% 76.18% 75.18% N/ACapital Adequacy % 14.40% 15.09% 14.45% 13.81% N/A



10

The Housing Bank For Trade And Finance(THBK)

(JOD) Closing Price 8.6152-Week Range 8.25 - 8.95Average Traded Volume 3,249Free Float (%) 8.00%P/E (Annualized) 20.66P/BV 2.38Capital 252,000,000Market Cap 2,169,720,000Dividend Yield 2.90%

The Housing Bank for Trade and Finance (HBTF) was establishedin 1973 as a public shareholding limited company with a capitalamounting to half a million JOD. The primary focus of the Bankwas to provide housing finance, and hence the name. The bankcurrently is the second largest bank in Jordan and the third largestlisted company in terms of market capitalization in Jordan.

7.50

7.70

7.90

8.10

8.30

8.50

8.70

8.90

THBK reported an 8% increase in interest income during the firsthalf of the year that reached JOD 175.6 million compared toJOD 162.54 million in H1 2012.

The bank marked an impressive growth in gross profit of 23%which was due to a large increase in foreign currency revenuesthat reached JOD 41.21 million in H1 2013 compared to JOD11.9 million in H1 2012.

69%

27% 4%




Deposits Structure

Loans Structure


Stock Highlights


2011 2012H1

2012H1

2013 GrowthInterest Income (Mil) 292.42 336.44 162.54 175.60 8.03%Commission income (Mil) 35.09 33.39 17.47 16.66 -4.64%Net Income (Mil) 100.00 104.49 51.17 52.50 2.60%EPS 0.07 0.05 0.183 0.194 6.0%ROE % 9.53% 10.99% 10.76%11.51% N/AROA % 1.44% 1.47% 1.44% 1.49% N/A

36%

9%

18%

24% 13%



Stock Performance

The bank almost doubled the amount of provisions for bad debt taken for H1 2013 compared withFY 2012, as they stood at JOD 61.79 million, this affected total expenses with an increase of around88%. The bank’s net income stood at JOD 52.6 million during the first 6 months of 2013, a 2.60%increase than the net income reported in H1 2012. This has increased the NPL Coverage ratio from58.48% at the end of 2012 to 65.87% by the end of H1 2013.

The bank has been distributing cash dividends through out the last five years that ranged between20% and 25% from paid in capital. The bank announced this year the distribution of 25% cashdividends for the year 2012.


11


2010 2011 FY 2012 H1 2013 GrowthTotal Assets (Mil) 6679.7 6938 7091.63 7022.83 -0.97%Total Equity (Mil) 1023.9 1048.6 950.84 911.96 -4.09%Capital (Mil) 252 252 252 252 0.00%DepositsSaving and Term deposits (Mil) 3658.83 3659.59 3504.8 3512.73 0.23%Other deposits (Mil) 1149.73 1174.33 1222.39 1347.69 10.25%Cash Margins (Mil) 295.03 333.32 260.72 206.53 -20.78%Total deposits (Mil) 5103.6 5167.24 4987.91 5066.95 1.58%Due to Banks (Mil) 405.35 541.04 839.57 767.47 -8.59%Total Investments (Mil) 1573.31 2099.08 2252.09 2273.02 0.93%LoansLarge Corps (Mil) 1140.63 1197.26 1107.31 1035.95 N/ASMEs (Mil) 268.27 355.47 283.84 260.35 -8.28%Retail (Mil) 439.87 466.49 521.62 526.71 0.98%Mortgages (Mil) 517.96 535.47 663.79 694.08 4.56%Government (Mil) 262.44 535.47 364.46 368.43 0.00%Total Loans (Mil) 2629.17 3090.17 2941.02 2885.52 -1.89%Net Credit Facilities (Mil) 2449.1 2502.1 2683.88 2582.24 -3.79%Loans / Deposits Ratio % 51.52% 59.80% 58.96% 56.95% N/ANon Performing Loans (Mil) 261.94 268.65 324.4 341.74 5.35%Loans Provisions (Mil) 142.81 161.9 189.72 225.09 18.64%NPL Ratio % 9.96% 8.69% 11.03% 11.84% N/ANPL Coverage Ratio % 54.52% 60.26% 58.48% 65.87% N/ACapital Adequacy % 21.87% 20.31% 18.88% 18.52% N/A



12

Jordan Islamic Bank (JOIB)

(JOD) Closing Price 3.0652-Week Range 2.64 - 3.26Average Traded Volume 30,026Free Float (%) 24.91%P/E (Annualized) 7.75P/BV 1.63Capital 125,000,000Market Cap 382,500,000Dividend Yield 4.90%

Jordan Islamic Bank was established in 1978, as a publicshareholding limited company to carry out all kinds ofbanking, financing and investment business operations incompliance with the Islamic Sharia’ and in accordance with theprovisions of Jordan Islamic Bank’s Special Law.

1.80

2.00

2.20

2.40

2.60

2.80

3.00

3.20

3.40

3.60

3.80

JOIB has been growing rapidly during the past couple of years andso far 2013 is no different. The bank witnessed an impressive26% growth in deferred sale revenues, 21% growth in leasedassets and Ijara revenues and an amazing growth of 30% in netincome where it amounted to JOD 24.7 million during H1 2013compared to JOD 19 million in the same period last year.

38%

22%7%

33%

Individuals (Retail)Major Companies (Mil)SMEs (Mil)Government (Mil)


81%

16%

3%

Current Accounts (Mil)

Call Accounts (Mil)

Cash Margins (Mil)



Deposits Structure

Loans StructureProfitability figures

Stock Highlights

Prices as of 30th of September, 2013

2011 2012H1

2012H1

2013 GrowthDeferred Sale Revenues

85.91 115.46 53.82 67.92 26.20%

Revenues of Leased Assets and Ijara

16.27 20.88 10.18 12.3 20.83%

Total Revenues of Joint Investment accounts

111.23 146.52 69.01 83.53 21.04%

Net Income (Mil) 28.3 36.4 19.03 24.68 29.69%EPS 0.283 0.292 0.152 0.197 29.60%ROE % 13.67% 16.72% 16.66% 21.01% N/AROA % 0.28% 1.23% 1.26% 1.59% N/A

Stock Performance

JOIB paid 15% cash dividends annually during each of the previous five years - except year 2009 where the bank paid 12% -, the bank’s current dividend yield is 4.21%. The bank has paid 15% for the year 2012 as well. Judging from the improvement in profitability and growth witnessed so far during 2013, the bank will most likely at least meet the level of dividends it provided last year.


13


2010 2011 2012 H1 2013 Growth Total Assets (Mil) 2,604.00 2,898.00 3020.49 3101.15 2.67%Total Equity (Mil) 194.00 206.88 228.51 234.87 2.78%Capital (Mil) 100 100 125 125 0.00%DepositsCurrent Accounts (Mil) 562.00 658.00 708.09 747.78 5.61%Call Accounts (Mil) 107.00 124.00 130.92 144.45 10.33%Cash Margins (Mil) 35.919 30.36 30.15 29.62 -1.74%Total deposits (Mil) 704.919 812.36 869.16 921.85 6.06%Deferred Sale ReceivablesIndividuals (Retail) 662.331 727.99 768.91 789.07 2.62%Major Companies (Mil) 332.1 370.54 417.27 472.6 13.26%SMEs (Mil) 137.00 146.65 163.49 140.25 -14.21%Government (Mil) 72.00 24.00 700.65 699.44 -0.17%Total Deferred (Mil) 1,203.43 1,269.18 2,050.32 2,101.36 2.49%Net Deferred Sales & Other Receivables (Mil) 1,039.00 1,081.00 1,753.44 1810.29 3.24%Non Performing Loans (Mil) 69.305 94.32 91.94 101.37 10.26%Impairment Provision (Mil) 33.19 50.40 53.26 64.43 20.97%NPL Ratio % 5.63% 7.24% 4.42% 4.82% 9.14%NPL Coverage Ratio % 47.88% 53.44% 57.93% 63.56% 9.72%Capital Adequacy % 21.57% 24.48% 19.56% 16.87% -13.75%


Price as of 30th September, 2013

14

Bank Of Jordan(BOJX)


Bank of Jordan was established back in 1960 and currently has 96branches in Jordan and Palestine, the bank also operates in Syriathrough its subsidiary (Bank of Jordan – Syria). The bankannounced at the beginning of the year that it will focus on theretail sector, which is evident through the changes in the bank’sloan portfolio composition where retail loans consisted of 23% bythe end of H12013 compared to approximately 19.0% at thebeginning of 2012.

1.25

1.45

1.65

1.85

2.05

2.25

2.45

2.65

2.85

BOJX got off to a bad start this year where net income during Q12013 dropped 17.76% to reach JOD 6.99 million.However, profitability of the bank picked up during the secondquarter lowering the drop in net income to 6.10% during H12013.

The banks drop in interest income and commission incomecombined with almost stable interest expenses and an increase inprovisions taken for credit facilities impairment were all reasonsbehind the drop in net income during the period, mainly due toproblems witnessed in the Syrian branches of the bank

40%12%

23%

17%8%



70%

31% 5%




Deposits Structure

Loans Structure


Stock Highlights


Stock Performance

2011 2012H1

2012H1

2013Growth

Interest Income (Mil)

111.18 120.48 59.98 58.16 -3.03%

Commission income (Mil)

16.30 17.32 8.67 7.93 -8.54%

Net Income (Mil) 36.57 33.19 17.86 16.77 -6.10%EPS 0.24 0.21 0.12 0.11 -8.33%ROE % 13.19% 11.41% 6.29% 5.9% N/AROA % 1.78% 1.65% 0.88% 0.82% N/A

Deposits and Net Credit Facilities have both witnessed a slight drop during H1 2013 where they havedropped by 0.24% and 2.47% respectively. Total investments of the bank has dropped from JOD 35million to JOD 31.2 million, a drop of around 11%.

The bank has been constantly paying 15% cash dividends during the last five years, where it alsodistributed 15% during 2013.


15


2010 2011 2012 H1 2013 Growth Total Assets (Mil) 1969.06 2052.86 2016.63 1994.71 -1.09%Total Equity (Mil) 235.76 277.31 290.78 283.53 -2.49%Capital (Mil) 100 155.1 155.1 155.1 0.00%DepositsSaving and Term deposits (Mil) 1131.82 1133.62 1065.84 1145 7.43%Other deposits (Mil) 350.92 364.38 486.76 404.11 -16.98%Cash Margins (Mil) 101.67 102.03 84.67 84.15 -0.61%Total deposits (Mil) 1584.41 1600.03 1637.27 1633.26 -0.24%Total Investments (Mil) 104.25 133.42 35.04 31.19 -10.99%Due to Banks (Mil) 266.6 378.73 460.31 462.95 0.57%Loans Large Corps (Mil) 514.69 488.88 401.26 400.1 -0.29%SMEs (Mil) 123.59 167.79 137.62 119.95 -12.84%Retail (Mil) 186.75 213.29 230.29 234.32 1.75%Mortgages (Mil) 169.93 172.8 174.82 174.6 -0.13%Government (Mil) 28.39 82.91 84.1 79.57 -5.39%Total Loans (Mil) 1023.35 1125.67 1028.09 1008.54 -1.90%Net Credit Facilities (Mil) 961.16 1046.5 930.63 907.6 -2.47%Loans / Deposits Ratio % 64.59% 70.35% 62.79% 61.75% N/ANon Performing Loans (Mil) 86.74 110.61 113.12 114.6 1.31%Loans Provisions (Mil) 52.89 67.13 84.7 87.99 3.88%NPL Ratio % 8.48% 9.83% 11.00% 11.36% N/ANPL Coverage Ratio % 60.98% 60.69% 74.88% 76.78% N/ACapital Adequacy % 12.71% 13.90% 15.96% 16.99% N/A



16

Jordan Kuwait Bank(JOKB)

(JOD) Closing Price 3.1252-Week Range 3.00 - 3.66Average Traded Volume 11,934Free Float (%) 19.04%P/E 5.86P/BV 0.80Capital 100,000,000Market Cap 312,000,000Dividend Yield 6.41%

In 1976 a group of prominent Jordanian and Kuwaiti Investorscame together to establish a joint investment project in Jordanunder the name of Jordan Kuwait Bank, for the first 20 years thebank continued to be a medium-sized bank with moderateperformance, the bank took a massive turn starting from year1997 and is currently the fifth bank in terms of marketcapitalization.

2.50

2.70

2.90

3.10

3.30

3.50

3.70

3.90

JOKB posted in H1 2013 major increases in both interest incomeand commission income, as interest income increased 13.7% andamounted to JOD 70.16 million in H1 2013 compared to JOD61.71 million in H1 2012. While commission income rose16.63% to amount to JOD 5.75 million in the first six months of2013.

The bank witnessed in H1 2013 a major drop in gains fromfinancial securities compared to same period last year in which inH1 2013 they reached JOD 0.15 million compared to JOD 2.75million in H1 2012.

64%

31%5%

Saving and Term deposits (Mil)

Other deposits (Mil)

Cash Margins (Mil)



Deposits Structure

Loans Structure


Stock Highlights


2011 2012H1

2012H1

2013 GrowthInterest Income (Mil) 119.77 127.87 61.71 70.16 13.69%Commission income (Mil)

9.09 10.66 4.93 5.75 16.63%

Net Income (Mil) 39.70 46.61 25.64 26.64 3.90%EPS 0.40 0.47 0.25 0.26 4.00%ROE % 11.28%12.29% 14.03% 13.89% N/AROA % 1.75% 1.93% 2.19% 2.21% N/A

67%

7%

5%11% 10%



Stock Performance

The bank witnessed a 4% increase in net income in H1 2013 which equaled to JOD 26.64 millioncompared to JOD 25.64 million same period last year.

Total credit facilities declined by 8.61% during the first six months of 2013 amounting to JOD1364.10 million compared to JOD 1492.64 million FY 2012. During H1 2013 the bank saw a dropof 19% in nonperforming loans and reported an increase in loan provisions of 6.19%, to make thecoverage ratio increase to 58.41% in H1 2013 compared to 44.52% in FY 2012 .

The bank has been distributing dividends at an increasing rate, where dividends increased from 10%in 2008 to 20% in 2012.


17


2010 2011 FY 2012 H1 2013 GrowthTotal Assets (Mil) 2083.97 2273.65 2409.64 2403.19 -0.27%Total Equity (Mil) 330.73 352.02 379.13 388.17 2.38%Capital (Mil) 100 100 100 100 0.00%DepositsSaving and Term deposits (Mil) 923.26 930.67 945.02 998.45 5.65%Other deposits (Mil) 381.66 486.49 422.27 486.96 15.32%Cash Margins (Mil) 121.05 87.14 149.15 86.41 -42.07%Total deposits (Mil) 1425.96 1504.3 1516.44 1571.82 3.65%Due to Banks (Mil) 255.43 351.61 417.9 374.87 -10.30%Total Investments (Mil) 411.51 451.26 338.82 406.47 19.97%LoansLarge Corps (Mil) 848.3 945.55 1044.21 909.94 -12.86%SMEs (Mil) 36.26 44.37 64.3 91.72 42.64%Retail (Mil) 34.67 44.9 58.5 62.51 6.85%Mortgages (Mil) 169.71 162.75 167.41 155.75 -6.96%Government (Mil) 127.23 116.34 158.22 144.18 -8.87%Total Loans (Mil) 1216.17 1313.91 1492.64 1364.1 -8.61%Net Credit Facilities (Mil) 1170.47 1248.7 1416.26 1284.65 -9.29%Loans / Deposits Ratio % 85.29% 87.34% 98.43% 86.78% N/ANon Performing Loans (Mil) 42.68 135.15 146.56 118.62 -19.06%Loans Provisions (Mil) 42.88 56.62 65.25 69.29 6.19%NPL Ratio % 3.51% 10.29% 9.82% 8.70% N/ANPL Coverage Ratio % 100.47% 41.89% 44.52% 58.41% N/ACapital Adequacy % 18.25% 16.30% 16.31% 15.74% N/A



18

Cairo Amman Bank(CABK)


Cairo Amman Bank was established as a public company in 1960and currently has more than 77 branches in Jordan alone, inaddition to its operations in Palestine. The bank has beentargeting mainly retail customers where 53% of the current loanportfolio is granted to retail customers.

2.00

2.20

2.40

2.60

2.80

3.00

3.20

3.40

Cairo Amman bank revealed good results in the semiannualreport, as interest revenues hiked 21% reaching JOD 72.54million in H1 2013 compared to the same period last year whereit amounted to JOD 60.1 million. The bank saw a huge increasein interest expense to reach JOD 26.8 million an increase of 50%compared to H1 2012, accompanied with a 7% decrease ofcommission income in H1 2013. In spite of the increase ininterest expense and the drop in commission income, the banksaw a 5.12% growth in net income to reach JOD 17.44 million.

18%

5%

53%

12%12%



67%

29% 4%



Cash Margins (Mil)



Deposits Structure

Loans Structure


Stock Highlights


Stock Performance

2011 2012H1

2012H1

2013 GrowthInterest Income (Mil)

111.44 124.99 60.1 72.54 20.70%


80.77 19.34 10.12 9.43 -6.82%


The bank’s gross loan portfolio stalled during H12013 and stayed in the ranges of JOD 1060million. Large corporation loans witnessed an increase of 4% to reach JOD 191.56 million in H12013, while government loans dropped by 7.32% to amount to JOD 127.96 million. The NPLcoverage ratio has dropped from 96% to 81% during H1 2013.

The bank has been constantly paying cash dividends each year at an increasing rate since 2008, wherethe bank used to pay a mere 5% cash dividend back in 2008, while lately announcing the distributionof 17% of paid up capital as cash dividends for the year 2012.


19


2010 2011 FY 2012 H1 2013 GrowthTotal Assets (Mil) 1843.45 1940.36 2024.34 2189.66 8.17%Total Equity (Mil) 205.93 223.57 241.24 240.36 -0.36%Capital (Mil) 100 100 100 100 0.00%DepositsSaving and Term deposits (Mil) 1057.23 935.66 1000.38 1004.09 0.37%Other deposits (Mil) 278.62 439.47 399.95 432.31 8.09%Cash Margins (Mil) 44.54 47.42 41.97 55.00 31.05%Total deposits (Mil) 1380.39 1422.56 1442.3 1491.4 3.40%Due to Banks (Mil) 131.94 170.13 98.76 197.72 100.20%Total Investments (Mil) 419.24 440.34 520.49 637.71 22.52%LoansLarge Corps (Mil) 216.98 211.8 183.95 191.56 4.14%SMEs (Mil) 46.56 50.45 49.73 48.93 -1.61%Retail (Mil) 437.38 512.43 558.25 565.42 1.28%Mortgages (Mil) 113.38 123.99 128.09 127.48 -0.48%Government (Mil) 63.99 104.69 138.06 127.96 -7.32%Total Loans (Mil) 878.29 1003.36 1064.02 1061.35 -0.25%Net Credit Facilities (Mil) 823.1 947.59 1007.34 1001.69 -0.56%Loans / Deposits Ratio % 59.63% 66.61% 70.98% 71.16% N/ANon Performing Loans (Mil) 46.26 58.29 47.63 59.63 25.19%Loans Provisions (Mil) 44.28 45.23 45.77 48.47 5.90%NPL Ratio % 5.62% 6.15% 4.52% 5.62% N/ANPL Coverage Ratio % 95.72% 77.59% 96.09% 81.28% N/ACapital Adequacy % 14.93% 15.14% 14.93% 14.74% N/A



20

Al Ahli Bank(AHLI)

(JOD) Closing Price 1.1152-Week Range 1.07- 1.33Average Traded Volume 53,506Free Float (%) 42.68P/E (Annualized) 8.30P/BV 0.66Capital 165,000,000Market Cap 183,150,000Dividend Yield 8.93

Jordan Ahli Bank was established in 1955 and was the sixthpublic shareholding company to be established in Jordan.Currently the bank has regional presence in Lebanon, Palestineand Cyprus, in addition to a 19% ownership in JordanInternational Bank (JIB) that is based in London.

0.70

0.90

1.10

1.30

1.50

1.70

1.90

During the first 6 months of 2013 the bank posted a 12%increase in interest income that amounted to JOD 76.09 millioncompared to JOD 67.97 million in H1 2012. Commissionincome saw a drop of 12% while total expenses increased by3.4%. The bank incurred losses from financial securities of JOD490 thousand compared to gains of JOD 582 thousand duringthe same period last year, this – along side with the increase ininterest expense - resulted in a drop in net income by 9% duringH1 2013 where it stood at JOD 11.03 million compared to sameperiod last year where net income amounted to JOD 12.11million.

43%16%

30%9% 2%



65%

22%13%




Deposits Structure

Loans Structure


Stock Highlights


Stock Performance

2011 2012H1

2012H1


126.67 140.46 67.97 76.09 11.95%


20.51 20.87 10.96 9.62 -12.23%

Net Income (Mil) 23.24 24.60 12.11 11.03 -8.92%EPS 0.18 0.16 0.08 0.07 -12.5%ROE % 9.12% 9.08% 4.61% 4.2% N/AROA % 0.89% 0.93% 0.46% 0.42% N/A

The bank saw an increase in credit facilities by 3.23%in H1 2013 compared to 2012 year-endreaching a total of JOD 1472.26 million mainly due to a hike in mortgage loans by 21% in H1 2013that amounted to JOD 136.67 million.

The bank has been consistently increasing its capital since 2008 on a yearly basis by distributing stockdividends each year. In the beginning of 2013 the bank has announced the distribution of 10% ofstock dividends taking its capital up to JOD 165 million.


21


2010 2011 FY 2012 H1 2013 GrowthTotal Assets (Mil) 2519.66 2616.67 2651.29 2599.49 -1.95%Total Equity (Mil) 228.67 254.88 270.87 278.42 2.79%Capital (Mil) 110 126.5 150 165 10.00%DepositsSaving and Term deposits (Mil) 1244.78 1283.12 1355.09 1354.47 -0.05%Other deposits (Mil) 419.55 422.14 441.99 465.58 5.34%Cash Margins (Mil) 216.88 242.38 263.62 265.58 0.74%Total deposits (Mil) 1881.21 1947.64 2060.7 2085.63 1.21%Due to Banks (Mil) 356.75 350.56 200.07 130.01 -35.02%Total Investments (Mil) 568.91 614.99 537.19 548.59 2.12%LoansLarge Corps (Mil) 576.42 599.88 622.59 628.43 0.94%SMEs (Mil) 191.26 228.58 228.91 233.59 2.04%Retail (Mil) 400.34 472.08 433.75 447.09 3.08%Mortgages (Mil) 0 0 113.26 136.67 20.67%Government (Mil) 27.1 13.23 27.63 26.48 -4.16%Total Loans (Mil) 1195.12 1313.77 1426.14 1472.26 3.23%Net Credit Facilities (Mil) 1066.25 1178.23 1275.02 1311.06 2.83%Loans / Deposits Ratio % 59.13% 63.90% 71.41% 70.59% N/ANon Performing Loans (Mil) 174.44 176.29 183.35 201.47 9.88%Loans Provisions (Mil) 81.44 88.06 98.85 105.28 6.50%NPL Ratio % 14.60% 13.42% 12.86% 13.68% N/ANPL Coverage Ratio % 46.69% 49.95% 53.91% 52.26% N/ACapital Adequacy % 11.03% 11.60% 12.21% 11.47% N/A



22

Capital Bank Of Jordan(EXFB)

(JOD) Closing Price 1.1352-Week Range 1.05 - 1.27Average Traded Volume 152,714Free Float (%) 15.59P/E (Annualized) 5.16P/BV 0.77Capital 165,000,000Market Cap 186,450,000Dividend Yield 8.85%

First established as the Export and Finance Bank at an authorizedcapital of JOD 20 million, which has steadily increased over theyears to reach JOD 150 million under the bank’s new identity asCapital Bank. The bank also offers services in the Iraqi marketthrough the National Bank of Iraq (NBI) in which it owns a 72percent controlling stake.

0.70

0.80

0.90

1.00

1.10

1.20

1.30

1.40

1.50

1.60

1.70

EXFB witnessed an impressive increase of 35% in net income. In2012 EXFB growth was mainly due to commission income whereit doubled during 2012, while during H1 2013 we notice thatcommission income has dropped 32%, making the growth of30% in interest income the main fuel for the growth witnessed inNet income.

Other revenues of the bank have also went up from JOD 0.97million in H1 2012 to JOD 3.38 million by the end of H12013, which further contributed to the growth witnessed in netincome

63%

5%15%

15%

2%



70%

3%6%



Cash Margins (Mil)



Deposits Structure

Loans Structure


Stock Highlights

Price as of 30thof September, 2013

Stock Performance

2011 2012H1

2012H1


70.57 81.55 37.57 48.71 29.65%


14.68 32.21 17.1 11.67 -31.75%

Net Income (Mil) 1.43 22.04 13.36 18.07 35.25%EPS 0.01 0.15 0.09 0.11 11.11%ROE % 0.65% 9.86% 6% 8.13% N/AROA % 0.10% 1.37% 0.89% 1.2% N/A

Provisions taken for the impairment of credit facilities has dropped from JOD 10.47 million in H12012 to JOD 1.92 million during H1 2013. It should be noted that several banks have either reducedthe amount of provisions taken during the period, or sometimes reversed some of the provision.

The bank’s NPL coverage ratio has increased from 42.2% recorded in the end of 2012 to 49.84% bythe end of H1 2013. It should be noted also that even though the bank witnessed a huge increase ininterest income, the banks net credit facilities grew by a mere 2.41% during the period, mainly in theSMEs segment. Surpassed by growth in deposits which grew by 6.67% making the loans to depositsratio drop to 62.71%.

The bank has not distributed cash dividends for the last five years, although during the generalassembly meeting of year 2011, the chairman of the board stated that they were consideringdistributing either stock or cash dividends but given that they needed to take extra provisions during2011, the bank didn’t distribute any dividends. Worth noting that this year the bank distributed10% of paid up capital as stock dividends to shareholders.



23Source: ASE, Bloomberg, Bank’s Financials

2010 2011 FY 2012 H1 2013 GrowthTotal Assets (Mil) 1204.77 1395.84 1606.92 1683.67 4.78%Total Equity (Mil) 214.11 221.26 223.46 242.3 8.43%Capital (Mil) 150 150 150 165 10.00%DepositsSaving and Term deposits (Mil) 738.1 673.58 678.18 773.15 14.00%Other deposits (Mil) 16.61 214.33 282.79 261.9 -7.39%Cash Margins (Mil) 52.05 57.75 70.2 64.91 -7.54%Total deposits (Mil) 806.77 945.66 1031.17 1099.96 6.67%Due to Banks (Mil) 100.49 123.84 82.54 101.24 22.66%Total Investments (Mil) 252.08 362.1 555.75 617.39 58.31%LoansLarge Corps (Mil) 539.09 517.16 438.39 432.98 -1.23%SMEs (Mil) 16.92 28.72 31.3 36.46 16.48%Retail (Mil) 75.31 76.61 92.19 102.28 10.94%Mortgages (Mil) 75.56 82.57 97.07 104.46 7.61%Government (Mil) 18.41 17.26 14.65 13.65 -6.83%Total Loans (Mil) 725.29 722.32 673.6 689.83 2.41%Net Credit Facilities (Mil) 670.12 655.86 632.31 633.81 1.68%Loans / Deposits Ratio % 89.90% 76.38% 65.32% 62.71% N/ANon Performing Loans (Mil) 122.51 134.91 81.23 72.86 -10.30%Loans Provisions (Mil) 44.43 47.75 34.28 36.31 5.92%NPL Ratio % 16.89% 18.68% 12.06% 10.56% N/ANPL Coverage Ratio % 36.27% 35.39% 42.20% 49.84% N/ACapital Adequacy % 17.63% 15.44% 17.95% 17.16% N/A


24

Bank Al Etihad(UBSI)

(JOD) Closing Price 1.3652-Week Range 1.30 - 1.58Average Traded Volume 133,036Free Float (%) 15%P/E (Annualized) 7.37P/BV 0.63Capital 110,000,000Market Cap 149,600,000Dividend Yield 7.35%

Bank Al Etihad was established in 1978 as a public shareholdingcompany. The bank was originally well known to be strong incorporate banking which has been the competitive edge of thebank. In year 2012, the bank started a rebranding campaigncombined with a new growth strategy which focuses on gainingmarket share in the retail sector.

1.00

1.10

1.20

1.30

1.40

1.50

1.60

1.70

1.80

1.90

2.00

The bank reported impressive results in H1 2013, where interestincome grew by 24% over the same period last year, where itamounted to JOD 47.19 million compared to JOD 37.82 million.Total expenses were reduced by 22% in the first six months of2013 where they amounted to JOD 18.50 million compared toJOD 23.69 million in H1 2012. The increase in interest incomeand the decrease in total expenses boosted the net incomegenerated in H1 2013 by more than double the amount recordedin H1 2012 where they reached JOD 10.15 million.

68%

7%6%

15% 4%



66%

14%20%




Deposits Structure

Loans Structure


Stock Highlights


Stock Performance

2011 2012H1

2012H1


73.97 79.23 37.82 47.19 24.78%


30.88 44.51 6.18 6.14 -0.65%


Like several other banks, the amount of provisions taken for credit facilities impairment droppedsignificantly this year, where they dropped from JOD 11.33 million to JOD 3.06 million during H12013.

The bank’s loan portfolio grew by 7.38% to reach JOD 979.51 million in H1 2013 compared to 2012year end where total loans reached JOD 912.23 million that was due to the 11.6% increase in thelarge corporation loans which formed 68% of the total loans.

UBSI dividend distribution dropped from 12% in 2010 to 6% in 2011 due to a drop in the bank’sprofitability. The bank was able to increase its capital by JOD 10 million by distributing 10% stockdividends for the year 2012, while not paying any cash dividends for the same period.



25


2010 2011 FY 2012 H1 2013 GrowthTotal Assets (Mil) 1539.4 1461.54 1750.12 1822.97 4.16%Total Equity (Mil) 235.19 224.91 235.04 239.09 1.72%Capital (Mil) 100 100 100 110 10.00%DepositsSaving and Term deposits (Mil) 782.58 759.63 815.59 867.51 6.37%Other deposits (Mil) 129.87 114.67 149.44 177.75 18.94%Cash Margins (Mil) 110.94 185.52 266.44 257.18 -3.48%Total deposits (Mil) 1023.39 1059.81 1231.47 1302.44 5.76%Due to Banks (Mil) 240.95 141.54 261.85 249.45 -4.74%Total Investments (Mil) 307.58 254.58 244.84 363.62 48.51%LoansLarge Corps (Mil) 510.46 508.88 597.79 667.18 11.61%SMEs (Mil) 45.14 52.12 63.91 67.38 5.43%Retail (Mil) 34.93 39.97 60.13 61.34 2.01%Mortgages (Mil) 159.35 163.74 147.52 148.45 0.63%Government (Mil) 7.58 17.82 42.88 35.16 0.00%Total Loans (Mil) 757.46 782.53 912.23 979.51 7.38%Net Credit Facilities (Mil) 711.8 723.79 836.53 906.2 8.33%Loans / Deposits Ratio % 74.01% 73.84% 74.08% 75.21% N/ANon Performing Loans (Mil) 71.53 106.54 96.68 96.79 0.11%Loans Provisions (Mil) 33.11 43.75 55.84 54.06 -3.19%NPL Ratio % 9.44% 13.61% 10.60% 9.88% N/ANPL Coverage Ratio % 46.29% 41.06% 57.76% 55.85% N/ACapital Adequacy % 18.75% 16.91% 15.22% 15.50% N/A


26

Arab Jordan Investment Bank(AJIB)

(JOD) Closing Price 1.4652-Week Range 1.30 - 1.52Average Traded Volume 9,495Free Float (%) 20.04P/E (Annualized) 8.53P/BV 0.97Capital 100,000,000Market Cap 146,000,000Dividend Yield 8.22%

0.70

0.90

1.10

1.30

1.50

1.70

1.90

AJIB reported an increase in net income of 4.14% in H12013, where net income reached JOD 8.56 million compared tothe same period last year which reported JOD 8.22 million. Thebank was able to maintain its growth due to the increase of 11%in interest income as it stood at JOD 28.73 million, whilecommission income remained unchanged. The bank’s profit fromassociates amounted to JOD 807 thousand, a reversal from lossesof JOD 358 thousand witnessed same period last year, whichfurther aided the improvement in profitability.

33%

8%

18%

17%

24%



69%

26% 5%



Cash Margins (Mil)



Deposits Structure

Loans Structure


Stock Highlights


The Arab Jordan Investment Bank (AJIB) was founded in1978, to become the first investment bank in Jordan. It offers awide variety of investment, commercial and private bankingproducts and solutions.

Stock Performance

2011 2012H1

2012H1


43.98 54.67 25.89 28.73 10.97%


4.40 4.48 2.22 2.22 0.00%


The bank saw a substantial change in its loan portfolio, where mortgage loans were substantiallyincreased by 21.4% to amount to JOD 70.97 million while large corporation and retail loans saw adrop of 7.85 % and 8.23% to amount to JOD 136.63 million and JOD 72.30 million respectively.The overall loan portfolio has dropped by 1.59% while net credit facilities went up 15.76% to JOD389.06 million. Total deposits also saw an increase of 1.75% to reach JOD 608.76 million, thisincrease was fueled by the increase of other deposits and cash margins.

The bank was continuously distributing cash dividends, increasing from 8% in 2009 to 10% in 2010 and 2011, and in 2012 the bank distributed 12% of cash dividends.


27


2010 2011 FY 2012 H1 2013 GrowthTotal Assets (Mil) 871.17 927.26 1032.91 1170.06 13.28%Total Equity (Mil) 129.31 129.84 155.12 150.08 -3.25%Capital (Mil) 100 100 100 100 0.00%DepositsSaving and Term deposits (Mil) 403.41 407.23 423.38 420.09 -0.78%Other deposits (Mil) 113.64 138.03 148.46 159.25 7.27%Cash Margins (Mil) 31.5 25.52 26.45 29.42 11.21%Total deposits (Mil) 548.55 570.79 598.3 608.76 1.75%Total Investments (Mil) 179.32 211.21 261.64 293.84 12.31%Due to Banks (Mil) 293.36 355.34 354.64 452.97 27.73%Loans Large Corps (Mil) 130.06 158.33 148.26 136.63 -7.85%SMEs (Mil) 43.75 32.71 33.22 33.83 1.83%Retail (Mil) 65.22 64.18 78.78 72.3 -8.23%Mortgages (Mil) 56.79 59.44 58.44 70.97 21.44%Government (Mil) 43.37 38.92 99.33 97.67 -1.68%Total Loans (Mil) 339.19 353.58 418.04 411.4 -1.59%Net Credit Facilities (Mil) 323.82 332.2 331.1 383.29 15.76%Loans / Deposits Ratio % 61.83% 61.95% 69.87% 67.58% N/A Non Performing Loans (Mil) 20.27 30.09 32.27 34.65 7.39%Loans Provisions (Mil) 9.81 14.62 18.09 19.41 7.31%NPL Ratio % 5.98% 8.51% 7.72% 8.42% N/ANPL Coverage Ratio % 48.40% 48.59% 56.06% 56.02% N/ACapital Adequacy % 17.92% 17.79% 17.50% 20.30% N/A


Price as of 30thof September, 2013

28

Invest Bank(INVB)


Investbank started its activities in 1982 under the name JordanInvestment and Finance Company with an authorized capital ofJOD 6 million, the bank transformed into an investment bank inyear 1989 and grew significantly from then, where it now has thepaid up capital of JOD 100 million. The bank had an importantrole in establishing Jordan Duty Free Shops (JDFS) – one of thelargest market caps in the ASE - and currently owns 10% of thecompany.

0.70

0.80

0.90

1.00

1.10

1.20

1.30

1.40

1.50

1.60

1.70

While INVB’s core operations have improved - witnessing agrowth of 5.5% in interest income and 13.5% in interestcommission – the bank’s net income has dropped to JOD 7.33million during H1 2013, compared to JOD 10.05 million in thesame period last year. The main cause of the drop was the declinewitnessed in the bank’s other revenues, which dropped from JOD5.5 million to JOD 1.2 million; due to a one-off land saletransaction that took place during 2012.

67%

9%9%

15%

Large Corps (Mil)SMEs (Mil)Retail (Mil)Mortgages (Mil)


65%

24%11%




Deposits Structure

Loans Structure


Stock Highlights


2011 2012H1

2012H1

2013 GrowthInterest Income (Mil) 41.46 45.59 22.58 23.83 5.54%Commission income (Mil) 4.31 4.92 2.44 2.77 13.52%Net Income (Mil) 9.60 11.25 10.05 7.33 -27.06%EPS 0.11 0.11 0.10 0.07 -30%ROE % 7.28% 8.32% 7.52% 5.49% N/AROA % 1.39% 1.59% 1.43% 1.05% N/A

Stock Performance

The bank’s net credit facilities witnessed a modest growth of 4.11% during the first six months of 2013, while deposits dropped by 7.7% causing the Loans to Deposits ratio to increase to 83.75% by the end of period.

The bank distributed 8% cash dividends for the years 2011 and 2012. The first six months of 2013showed a drop in profitability with a modest growth in core operations, which might affect thepossibility of meeting the same level of dividends the bank distributed last year.


29


2010 2011 FY 2012 H1 2013 Growth Total Assets (Mil) 677.21 691.77 708.51 739.1 4.32%Total Equity (Mil) 107.6 131.9 135.23 134.52 -0.53%Capital (Mil) 77.5 85.25 100 100 0.00%Deposits

Saving and Term deposits (Mil) 335.13 340.32 401.63 359.25 -10.55%Other deposits (Mil) 114.17 129.31 139.19 131.68 -5.40%Cash Margins (Mil) 38.33 53.52 56.34 60.34 7.10%Total deposits (Mil) 487.62 523.14 597.16 551.27 -7.68%Due to Banks (Mil) 54.61 18.27 11.04 25.12 127.54%Total Investments (Mil) 183.88 168.4 127.15 135.64 6.68%Loans Large Corps (Mil) 237.76 250.91 285.3 308.66 N/ASMEs (Mil) 22.07 31.09 49.68 40.84 -17.79%Retail (Mil) 47.22 42.8 38.71 40.25 3.98%Mortgages (Mil) 63.14 60.88 72.3 71.93 -0.51%Government (Mil) 3.63 0.89 0.00 0.00 0.00%Total Loans (Mil) 373.82 386.57 445.99 461.68 3.52%Net Credit Facilities (Mil) 350.27 350.01 404.31 420.92 4.11%Loans / Deposits Ratio % 76.66% 73.89% 74.69% 83.75% N/ANon Performing Loans (Mil) 41.43 50.78 53.86 50.13 -6.93%Loans Provisions (Mil) 20.59 31.32 33.89 32.43 -4.31%NPL Ratio % 11.10% 13.10% 12.08% 10.86% N/ANPL Coverage Ratio % 49.70% 61.68% 62.92% 64.69% N/ACapital Adequacy % 16.13% 18.03% 16.49% 16.11% N/A



30

Arab Banking Corporation(ABCO)

(JOD) Closing Price 1.0452-Week Range 0.97 - 1.11Average Traded Volume 11,470Free Float (%) 9.64P/E (Annualized) 8.44

P/BV 0.81Capital 100,000,000Market Cap 104,000,000Dividend Yield 8.65%

Arab Banking Corporation was incorporated in Jordan in 1990 asa Jordanian public shareholding company. It is a member of theArab Banking Corporation Group, one of the largest Arabinternational banks with its head offices in the Kingdom ofBahrain and with branches and offices in all parts of the world.Arab Banking Corporation (Jordan) performs all bankingoperations at its head office in Amman and its 25 branches and49 automatic teller machines (ATMs) in all parts of the Kingdom.

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Interest income during H1 2013 went up by 21.71% reachingJOD 30.3 million, while commissions income dropped to JOD1.24 million. Most expenses went up during the period, except forprovisions which dropped to JOD 1.66 million from JOD 2.40million during H1 2012. Net income of the bank went up 14.1%to reach JOD 6.16 million by the end of H1 2013.

39%

40%

13%8%

SMEs (Mil)Retail (Mil)Mortgages (Mil)Government (Mil)


77%

16%7%



Cash Margins (Mil)



Deposits Structure

Loans Structure


Stock Highlights


2011 2012H1

2012H1

2013 GrowthInterest Income (Mil) 29.98 52.82 24.87 30.27 21.71%

Commission income (Mil) 2.79 2.74 1.74 1.24 -28.74%

Net Income (Mil) 11.30 11.03 5.40 6.16 14.07%

EPS 0.13 0.11 0.05 0.62 14.07%

ROE % 9.56%8.44% 4.32% 4.87% N/A

ROA % 1.49%1.33% 0.65% 0.72% N/A

Stock Performance

It should be noted that the bank witnessed an increase in interest expense during year 2012 aswell, where interest expense increased by 55% and amounted to JOD 21.95 million compared to2011 where it reached JOD 14.08 million. This trend seemed to continue during H1 2013 whereinterest expense increased 32.25% to reach JOD 12.91 million .

ABC bank has been increasing its capital over the years, starting from JOD 34.5 million in 2005 toreach JOD 100 million in 2012 through stock dividends except last year where the bank increased itscapital through private placement and also distributed 9% cash dividends; which was the first yearthe bank distributes cash dividends in the past five years. Therefore, in light of the increasedprofitability the bank witnessed during the year, there is no reason to believe that the bank will lowerits paid out dividend for the year 2013, noting that the bank offers an attractive dividend yield of8.65%.


31


2010 2011 FY 2012 H1 2013 GrowthTotal Assets (Mil) 697.21 758.08 827.35 880.01 6.36%Total Equity (Mil) 106.6 118.16 130.72 128.02 -2.07%Capital (Mil) 80 89.6 100 100 0.00%DepositsSaving and Term deposits (Mil) 257.96 360.73 388.3 444.41 14.45%Other deposits (Mil) 102.36 97.56 94.23 95.99 1.87%Cash Margins (Mil) 53.23 49.9 31.64 38.98 23.20%Total deposits (Mil) 413.55 508.2 514.17 579.38 12.68%Due to Banks (Mil) 147.63 2099.08 93.23 119.99 28.70%Total Investments (Mil) 193.78 237.07 226.06 253.41 12.10%LoansLarge Corps (Mil) N/A N/A N/A N/A N/ASMEs (Mil) 147.55 188.31 189.1 202.25 6.95%Retail (Mil) 129.71 161.71 193.74 204.87 5.74%Mortgages (Mil) 53.14 57.81 63.86 66.9 4.76%Government (Mil) 11.43 8.25 40.05 38.45 -4.00%Total Loans (Mil) 341.83 416.08 486.75 512.47 5.28%Net Credit Facilities (Mil) 312.12 394.31 462.64 486.41 5.14%Loans / Deposits Ratio % 82.66% 73.93% 94.67% 88.45% N/A

Non Performing Loans (Mil) 19.87 27.25 28.38 29.13 2.64%Loans Provisions (Mil) 12.93 15.49 16.58 18.34 10.62%NPL Ratio % 5.81% 6.55% 6.05% 5.68% N/ANPL Coverage Ratio % 65.07% 56.84% 55.79% 62.96% N/ACapital Adequacy % 29.20% 24.70% 23.39% 22.37% N/A



32

Jordan Commercial Bank(JCBK)

(JOD) Closing Price 1.0252-Week Range 0.88 - 1.07Average Traded Volume 51,281Free Float (%) 9.61%P/E (Annualized) 10.94P/BV 0.87Capital 100,000,000Market Cap 102,000,000Dividend Yield N/A

Jordan Commercial Bank is a Jordan-based public shareholdingcompany that was established in 1977 and was named JordanGulf Bank. In 2009 it was renamed as Jordan Commercialbank, the bank is specialized in providing commercial bankingand investment solutions.

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The bank has reported gains in both interest income andcommission income during the first six months of 2013, inwhich interest income increased 18.54% to stand at JOD 26.28million in H1 2013 compared to the same period last year whereit reached JOD 22.17 million.

Net income climbed to reach JOD 4.66 million in H1 2013compared to JOD 0.77 million, that was mainly due to a drop inthe provisions for credit facilities where they dropped by aroundJOD 3.0 million which also dropped total expenses by 13.0%.

51%

16%

16%14% 3%

Large Corps (Mil)SMEs (Mil)Retail (Mil)Mortgage (Mil)Government (Mil)


76%

26%8%




Deposits Structure

Loans Structure


Stock Highlights


2011 2012H1

2012H1

2013 GrowthInterest Income (Mil) 42.73 45.61 22.17 26.28 18.54%Commission income (Mil) 5.07 5.33 2.59 2.79 7.72%Net Income (Mil) -1.34 2.06 0.77 4.66 505.19%EPS -0.02 0.02 0.01 0.05 400%ROE % -1.46% 1.99% 0.79% 4.78% N/AROA % -0.17% 0.24% 0.09% 0.57% N/A

Stock Performance

The bank witnessed an increase of 12.46% in the total credit facilities in which they amounted JOD552.05 million in H1 2013 compared to FY 2012 where they reached JOD 490.89 million. Thelargest segment that saw an increase was the retail segment which increased compared to 2012 yearend by an impressive 49.25%, while large corporation loans increased 11.35% in the sameperiod, noting that nonperforming loans dropped 9.47% to amount to JOD 37.72 million in H12013.

The bank has stopped distributing dividends since 2009 and has not yet revealed any intention ofdistributing stock or cash dividends in the near future.


33


2010 2011 FY 2012 H1 2013 GrowthTotal Assets (Mil) 762.78 801.44 844.34 947.06 12.17%Total Equity (Mil) 94.24 91.84 103.47 115.93 12.04%Capital (Mil) 80.36 82.77 93.34 100 7.14%DepositsSaving and Term deposits (Mil) 444.78 498.57 448.69 492.45 9.75%Other deposits (Mil) 106.79 111.27 169.81 193.79 14.12%Cash Margins (Mil) 45.59 39.17 57.29 56.52 -1.34%Total deposits (Mil) 597.16 649.01 675.79 742.76 9.91%Due to Banks (Mil) 47.73 44.36 38.85 72.94 87.75%Total Investments (Mil) 182.19 202.05 174.69 249.79 42.99%LoansLarge Corps (Mil) 259.55 248.76 253.34 282.1 11.35%SMEs (Mil) 50.04 70.11 79.59 85.16 7.00%Retail (Mil) 106.67 37.14 59.39 88.64 49.25%Mortgages (Mil) 0 85.44 79.5 78.61 -1.12%Government (Mil) 10.5 18.8 19.07 17.54 -8.02%Total Loans (Mil) 426.76 460.25 490.89 552.05 12.46%Net Credit Facilities (Mil) 390.45 420.31 440.52 498.59 13.18%Loans / Deposits Ratio % 71.47% 70.92% 72.64% 74.32% N/ANon Performing Loans (Mil) 70.18 81.92 84.97 76.92 -9.47%Loans Provisions (Mil) 15.06 30.01 36.34 37.72 3.80%NPL Ratio % 17.10% 17.80% 17.31% 13.93% N/ANPL Coverage Ratio % 21.46% 36.63% 42.77% 49.04% N/ACapital Adequacy % 13.60% 10.68% 12.40% 12.63% N/A



34

Jordan Dubai Islamic Bank(JDIB)

(JOD) Closing Price 0.8552-Week Range 0.84 – 1.04

Average Traded Volume 49,162Free Float (%) 18.39%P/E (Annualized) 51.20P/BV 0.66Capital 100,000,000Market Cap 85,000,000Dividend Yield N/A

In 2007, Dubai Islamic Bank along with its partner Jordan DubaiCapital started discussions with the shareholders of the IndustrialDevelopment Bank to convert and restructure it into a fullyfledged Islamic Commercial Bank. Together with the namechange, the charter documents have also been revised to reflectthe bank’s identity as a Sharia compliant and halal institution.

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The bank had an impressive first half where deferred salerevenues went up 35% while revenues of leased assets went up by85% causing the revenues of joint investment accounts to rise by45.5%. However, JDIB’s net income has dropped from JOD 1.22million to JOD 0.83 million, mainly as a result of the one-off taxreturns the bank obtained during the first half of 2012.

19%

68%

13%

Individuals (Retail)Major Companies (Mil)Government (Mil)


81%

19%

Current Accounts (Mil)Cash Margins (Mil)



Deposits Structure

Loans StructureProfitability figures

Stock Highlights


Stock Performance

2011 2012H1

2012H1

2013Growth

Deferred Sale Revenues

8.83 14.07 6.42 8.67 35.05%

Revenues of Leased Assets and Ijara

4.01 6.71 2.85 5.28 85.26%

Total Revenues of Joint Investment accounts

14.61 22.15 9.91 14.42 45.51%

Net Income (Mil) 5.35 2.13 1.22 0.83 -31.97%

EPS 0.06 0.023 0.014 0.008 -42.86%ROE % 4.65% 1.68% 1.92% 1.29% N/A

ROA % 1.53% 0.45% 0.51% 0.31% N/A


35


The bank’s total deferred sales had dropped 16.7% during H1 2013, while total deposits haveincreased 10.12% to reach JOD 83.44 million.

JDIB has been increasing its capital over the years, starting from JOD 34.5 million in 2005 to reachJOD 100 million in 2012 through stock dividends except for last year, the bank has increased itscapital through private placement, while distributing 9% of cash dividends from paid up capital;noting that it was the first year the bank distributes cash dividends in the past five years. In light ofthe current bank performance, if JDIB is able to maintain the growth witnessed in the first half forthe remainder of the year, the bank might be able to distribute dividends at the same level of lastyear.

2010 2011 2012 H1 2013 Growth Total Assets (Mil) 268.09 350.42 475.22 526.1 10.71%Total Equity (Mil) 103.32 115.06 127.06 128.15 0.86%Capital (Mil) 75.00 89.00 100.00 100.00 0.00%DepositsCurrent Accounts (Mil) 28.78 38.64 58.45 67.37 15.26%Call Accounts (Mil) 0.00 0.00 0.00 0.00 0.00%Cash Margins (Mil) 1.85 4.46 17.32 16.07 -7.22%Total deposits (Mil) 30.63 43.1 75.77 83.44 10.12%

Deferred Sale ReceivablesIndividuals (Retail) 5.45 17.61 35.57 44.55 25.24%Major Companies (Mil) 106.79 186.37 213.13 161.1 -24.41%SMEs (Mil) 0.00 0.00 0.00 0.00 0.00%Government (Mil) 0.00 0.00 33.95 29.75 -12.37%Total Deferred (Mil) 112.24 203.98 282.65 235.4 -16.72%Net Deferred Sales & Other Receivables (Mil)

109.73 195.84 263.72 207.9 -21.17%

Non Performing Loans (Mil) 0.94 8.79 8.74 9.1 4.12%Impairment Provision (Mil) 0.31 1.35 4.27 5.28 23.65%NPL Ratio % 0.68% 3.22% 2.29% 3.87% N/A NPL Coverage Ratio % 33.24% 15.30% 48.86% 58.02% N/A Capital Adequacy % 79.85% 50.08% 42.70% 44.87% N/A



36

Societe Generale De Banque – Jordanie (SGBJ)

(JOD) Closing Price 0.9052-Week Range 0.83 - 0.90Average Traded Volume 27,222Free Float (%) 5.55%P/E (Annualized) 14.06P/BV 0.83Capital 100,000,000Market Cap 90,000,000Dividend Yield N/A

The Middle East Investment Bank was established in 1965 andcontinued to operate under that name until in 2003 SocieteGenerale De Banque Au Liban (SGBL) acquired a part of thebank and changed its name to Societe Generale De Banque –Jordanie (SGBJ). SGBJ share has increased gradually throughoutthe years and has now reached 87.7% of total shares.

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The bank saw a massive increase in interest income which grew54% in H1 2013 compared to H1 2012, interest income wasspotted at JOD 15.23 million, while commission income dropped36% to amount to JOD 0.97 million. SGBJ witnessed a decreasein total expenses dropping 23% which was due to reversing someprovisions. As a result of the improvement in interest income andthe decrease in interest expense and provisions taken, net incomewas boosted by 81.82% to reach JOD 3.2 million in H1 2013compared to JOD 1.76 million in H1 2012.

33%

5%

24%

24%

Large Corps (Mil)SMEs (Mil)Retail (Mil)Mortgages (Mil)


81%

13% 6%




Deposits Structure

Loans Structure


Stock Highlights


2011 2012 H1

2012H1

2013 Growth

Interest Income (Mil) 18.03 22.62 9.88 15.23 54.15%Commission income (Mil) 2.16 2.23 1.53 0.97 -36.60%Net Income (Mil) 3.26 4.73 1.76 3.2 81.82%EPS 0.07 0.05 0.035 0.032 8.57%ROE % 5.42% 4.49% 4.25% 5.99% N/AROA % 0.90% 0.99% 0.84% 1.26% N/A

Stock Performance

The bank’s total credit facilities grew 4.16% during the first six months to reach JOD 219.91 millionrevealing promising signs of potential growth during this year, the main increase in the bank’s loanportfolio was the SME’s loans which increased 37.61%, while the largest segment in the portfolio(large corp. loans) dropped 8%. Saving and term deposits grew 13%, while cash margins werebroadened by 25.50% which increased total deposits by 12%.

Total investments witnessed a 34% increase in the first six months of 2013 and amounted to JOD214.11 million. The bank hasn’t yet paid any cash or stock dividends for the past years.


37


2010 2011 FY 2012 H1 2013 GrowthTotal Assets (Mil) 342.66 360.97 479.47 533.1 11.19%Total Equity (Mil) 57.31 60.18 105.31 108.52 3.05%Capital (Mil) 40.00 50.00 100.00 100.00 0.00%DepositsSaving and Term deposits (Mil) 191.07 217.11 269.15 303.63 12.81%Other deposits (Mil) 37.46 44.71 56.90 57.52 1.09%Cash Margins (Mil) 37.86 17.68 28.39 35.63 25.50%Total deposits (Mil) 266.38 279.51 354.44 396.78 11.95%Due to Banks (Mil) 3.74 4.31 2.68 2.58 -3.73%Total Investments (Mil) 107.57 131.21 159.85 214.11 33.94%LoansLarge Corps (Mil) 55.07 65.76 78.07 71.84 -7.98%SMEs (Mil) 26.7 23.38 30.87 42.48 37.61%Retail (Mil) 48.94 46.86 52.77 53.64 1.65%Mortgages (Mil) 31.47 34.75 49.41 51.95 5.14%Government (Mil) 0.00 0.00 0.00 0.00 0.00%Total Loans (Mil) 162.18 170.75 211.12 219.91 4.16%Net Credit Facilities (Mil) 129.19 135.59 171.03 180.08 5.29%Loans / Deposits Ratio % 60.88% 61.09% 59.56% 55.42% N/ANon Performing Loans (Mil) 8.03 8.23 9.08 42.11 -0.40%Loans Provisions (Mil) 129.19 135.59 171.03 8.58 -5.51%NPL Ratio % 22.40% 22.13% 20.03% 19.15% N/ANPL Coverage Ratio % 21.77% 21.77% 21.48% 20.38% N/ACapital Adequacy % 28.77% 25.25% 36.07% 36.58% N/A


38

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