Awards for Excellence 2019
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This year’s best bank in the Middle East has come a long way to reclaim the title it last won a decade ago. In 2009, we praised Arab Bank for its unmatched ability to survive a crisis, having coped with, and even grown during, the financial crisis that overcame the world’s markets the year before.
Back then, Arab Bank was already engulfed in an arduous legal battle over alleged terrorist financing – a litigation that lasted 14 years, from 2004, and weighed down the bank’s balance sheet with the threat of big payouts. That difficulty clouded perceptions of the bank’s worth; its conclusion last year has lifted that cloud.
Now it is plain for all to see how much Arab Bank has grown and improved under the leadership of Nemeh Sabbagh, chief executive since 2010.
Even as the Gulf’s largest banks have seemed to bombastically dominate the Middle Eastern banking sector in recent years, Arab Bank, long Jordan’s best financial institution, was catching up to their successes. It cleaned up its loan portfolio, implemented a highly successful digitization programme, and took steps to mitigate the currency depreciation risk affecting its business in Turkey.
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Nemeh Sabbagh |
Arab Bank can rely on its wide geographic diversification – with 70% of its income generated outside Jordan – to cope with the region’s unpredictable risks. Return on equity, meanwhile, long its Achilles heel, rose from 6.3% to 9.5% last year. Before tax, it is closer to 13%.
Its cost to income is falling, as is its non-performing loan ratio. But this prudent approach has not prevented the bank from supporting the economies it does business in, for example by increasing its SME loan portfolio by 10.4% over the past year. It is similarly enthusiastic in its commitment to consumer lending.
Arab Bank continued to expand its network with five new branches, including four in Jordan and one in Algeria, and 25 new ATMs – with 13 in Jordan, six in Egypt and six in the United Arab Emirates. But nor did the bank just focus on its bricks-and-mortar offering, as it launched an updated version of its Arabi mobile application last year. New features of the app include instant registration, login with fingerprint, personalized app design based on the customer’s account type, fund transfers to local and international banks and requests for credit cards.
The bank’s innovation hub, AB iHub, launched in 2018, allows staff to connect with fintech startups and foster new ideas on how to prepare the bank for a changing world. Likewise, AB Accelerator, another one of the bank’s projects, supports post-seed fintech companies that have already established a product that Arab Bank believes can be adapted and matured to fit the broader MENA region.
One thing is clear to Arab Bank management: the past year showcased the best the bank can be. That reclaimed confidence makes it this year’s best in the region, too.
