Business

AMMAN — Arab Bank Group announced Saturday in a press statement that net profit after tax and provisions increased by 5.4 per cent during the first quarter (Q1) of 2014. 

According to the statement, net profit reached  $216.3 million at the end of last month compared to $205.1 million at the end of March 2013.

“Customer deposits rose 4 per cent to $34.3 billion compared to  $33 billion and total credit facilities grew by 2.5% to $23.1 billion from $22.6 billion,” the bank pointed out.

Arab Bank’s Chairman Sabih Masri said the financial performance during the first quarter reflected the progress the bank continues to make in implementing its strategy of diversifying income sources and concentrating  on operating revenues in all the countries in which it operates.

Chief Executive Officer Nemeh Sabbagh attributed this level of profitability to the bank’s success in dealing with local and regional developments.

“It shows that the bank’s prudent credit policies continue to preserve the overall quality of our credit portfolio, resulting in lower provisions for non-performing loans compared to the same period last year,” Sabbagh said.

He emphasised that the bank remains focused on its core operational activities as it raised net interest and commissions by 4 per cent and 8 per cent respectively compared to the same period last year. 

According to Sabbagh, the bank continues to maintain a high level of liquidity with its loan to deposit ratio at 61.1 per cent and its capital adequacy ratio standing at 14.6 per cent.

Masri concluded in the press statement by affirming that “Arab Bank will remain committed to providing banking solution at the highest standards throughout its extensive branch network across the Arab world and globally maintaining solid financial indicators and high quality of assets.”

AMMAN — The Housing Bank announced in a press statement on Saturday that it will distribute cash dividends to shareholders at a rate of 30 per cent.

According to the statement, shareholders approved during an ordinary general assembly meeting last week the report presented by the board of directors, and adopted the financial statements for 2013 and the future plan for 2014. 

Chairman Michel Marto told the shareholders that despite difficult political and economic conditions in most of the countries in region, the 2013 pre-tax profit amounted to JD150.1 million, 5.6 per cent higher than the JD142.2 million in 2012.

After-tax, the net profit stood at JD106.9 million last year compared to JD104.5 million in the previous year. 

Marto noted in the statement that shareholders equity rights reached JD1.1 billion, indicating that total assets increased to JD7.2 billion and that customers’ deposits rose to JD5.1 billion.

Total credit facilities portfolio amounted to JD3 billion.

The statement showed capital adequacy at 18.8 per cent and liquidity ratio at 159 per cent. 

Other indicators showed the loans-to-deposit ratio at 52.3 per cent, the return on assets at 1.5 per cent and the return on equity right at 10.2 per cent. The efficiency index (expenses to total income ratio) was about 37 per cent.

According to the statement, the Housing Bank topped the banking list in terms of the volume of saving deposits in local currency. 

“The bank had a 14.8 per cent share of total assets, a 15.8 per cent share of customer deposits and an 11.6 per cent share of direct credit facilities. The market capitalisation of the bank’s shares amounted JD2.2 billion at the end of 2013 constituting 12 per cent of total market capitalisation of companies’ shares listed in Amman Stock Exchange.

Operating branches in Jordan reached 119 with a total of 199 ATMs.

Marto concluded the statement by indicating that the bank’s external branches in Palestine and Bahrain, and subsidiary banks in Algeria and Britain showed good performance. The subsidiary bank in Syria was able to maintain good financial position, and strong financial solvency and liquidity despite of difficult conditions in Syria. 

Representation offices in Iraq, United Arab Emirates and Libya continued to promote the bank’s services.

ATHENS — Tourist arrivals in Greece increased by 15.5 per cent in 2013, according to the state statistics agency, a year when the country stabilised its shaky economy and avoided a messy exit from the euro.

Overall, there were over 17.9 million arrivals between January and December last year compared to 15.5 million in 2012, the agency indicated.

Most foreign arrivals — 88.1 per cent — came from elsewhere in Europe, a figure which rose 13.9 per cent year-on-year, including a 7.5 per cent increase from European Union (EU) states, the agency pointed out.

Among the 15.8 million Europeans who visited in 2013, there were 2.3 million from Germany, 1.9 million from Britain — albeit with a 3.9 per cent drop — and 1.2 million from France.

There was also a major influx from Russia, with arrivals increasing from 874,000 to 1.4 million.

Tourism, which makes up about 17 per cent of Greece's economy, had slumped in recent years with foreign vacationers turned off by images of striking Greeks and economic meltdown brought on by the debt crisis that began in 2009.

In 2012, there was political instability and double elections that stalled the progress of reforms and raised fears of a humiliating Greek exit from the euro.

Last year, Greece scored its first primary surplus in years. It began to lure back investors and convinced international creditors of its determination to carry out promised structural changes to revive the economy.

The Greek economy is expected to exit a six-year recession this year.

DUBAI — Iranians have rushed to gas stations to fill their cars before a price surge expected at midnight on Thursday as President Hassan Rouhani pushes ahead with a policy to cut fuel subsidies.

The new prices of subsidised petrol, diesel and compressed natural gas (CNG) have not been announced, but the increases will test Rouhani's support among a population battered by soaring inflation that has been exacerbated by economic sanctions.

With memories of riots at the pumps when cheap fuel was rationed for the first time, in 2007, police are on the alert, but do not expect trouble, Interior Minister Abdolreza Rahmani Fazli said.

"We have been preparing for two months to implement these plans in provinces, cities and rural areas," state news agency IRNA quoted Rahmani Fazli as saying on Thursday. "Considering the planning, it is expected that the second phase of target subsidies will take place without any problems or displeasure from people."

Rouhani's predecessor, Mahmoud Ahmadinejad, last cut subsidies for fuel, food and utilities in December 2010.

There were no riots, but the impact on inflation — which shot up from a record low of 8.8 per cent in August 2010 to around 40 per cent by the end of his term, exacerbated by tightened Western sanctions — was a major cause of public resentment.

Rouhani, who secured a surprise election win last June, has taken Iran into substantive talks with world powers on Iran's nuclear programme, hoping to get Europe and the United States to lift their sanctions.

He has also made fighting inflation a priority, but the subsidy cut is likely to reverse some of his progress on that front. Inflation currently stands at 35 per cent.

"[In 2007] there was chaos everywhere all across Tehran," remembers a 34-year-old engineer speaking by telephone from the capital. 

"I guess people learned that they can still live with higher prices," he said. "It's nice to pay very little for gasoline, but I am willing to pay the right price for the sake of having a better economy in long term."

Expect more

"Of course I don't want prices to go up, but the reality is that the prices have to become real," said a 30-year-old communication specialist in Tehran. "But I expect more services from the government in return, such as health and transportation."

Rouhani's first attempt at implementing subsidy reform was a disaster.

In February, his government partially replaced cash subsidies with food handouts. Images of people waiting hours for a few bags of groceries tarnished Rouhani's image as a competent manager and left him vulnerable to attacks from hardliners.

The criticism was so widespread Rouhani issued a public apology on state TV.

Currently, motorists with the right to subsidised gasoline receive 60 litres a month at the price of 4,000 riyals ($0.16) a litre, or $0.61 a gallon, using the central bank's official exchange rate.

Above that, motorists pay 7,000 riyals ($0.28) a litre for gasoline, or $1.02 a gallon.

AMMAN — The Arab Fund for Economic and Social Development (AFESD) on Wednesday extended a $50 million credit to finance small-and medium-sized enterprises (SMEs) in Jordan, either directly or through micro-funds.

According to a statement issued by the Central Bank of Jordan (CBJ), the loan aims at empowering SMEs due to their role in supporting the economy, reducing unemployment and combating poverty. 

“The loan also aims at enabling SMEs obtain necessary financing for their operations on a medium or long-term basis and at competitive rates,” the CBJ said.

Noting that the credit comes in light of the success achieved with the World Bank loan in this regard, the CBJ indicated that the period of the lending will be ten years at an interest rate of 2.5 per cent to be charged to the banks during the loan term.

The CBJ said it will sign agreements with interested banks according to specific conditions noting that the interest rate is much lower than the cost paid by banks from other resources.  

Around $62 million of the World Bank’s $70 million loan has been extended, benefiting more than 800 small businesses, of which 62 per cent are outside Amman. 

Women constituted 57 per cent of the beneficiaries, according to the CBJ, which expressed hope that the funding of small and micro-enterprises, expected to reach $120 million, would develop the sector and improve its contribution to the social and economic development of the country.    

BRUSSELS — Eurozone public finances improved in 2013 as the economy finally turned the corner on a record recession but total debt levels remained dangerously high, official data showed on Wednesday.

The average eurozone government deficit — the shortfall between revenue and spending — came in at 3 per cent of output last year.

That was in line with the European Union (EU) ceiling and down from 3.7 per cent in 2012, the Eurostat statistics agency said.

The overall figures are broadly in line with growing signs that the worst of the eurozone debt crisis, which at one point threatened to destroy the euro, is over although several member countries will be applying budget rigour and deep economic reforms for years to come.

Public finances in bailed out Greece and Portugal sent signals of marked improvement on Wednesday, Spain signalled faster recovery, and France — seen as lagging on reforms — detailed new policies to put its economy in shape. 

Total accumulated debt increased to 92.6 per cent of the gross domestic product (GDP), up from 90.7 per cent, rising even further above the EU 60 per cent limit.

The continued increase in total debt levels reflects the high cost of the economic slump and debt crisis as governments borrowed heavily in an effort to stabilise their economies.

Christian Schulz at Berenberg Bank said the figures were positive overall, showing that the debt crisis austerity programmes were “paying off”.

Adjusted figures excluding the cost of bank recapitalisation efforts were even better, giving a 2.8 per cent deficit for last year, Schulz remarked in a note.

“With growth returning, increasing tax revenues and falling [spending] should drive the eurozone’s deficit even lower in coming years,” he argued. 

For the full 28-nation EU, the average public deficit was 3.3 per cent, down from 3.9 per cent, while total debt increased to 87.1 per cent of the GDP from 85.2 per cent, Eurostat pointed out in a report based on submissions by the EU member states. 

Germany best, 

France lags 

Powerhouse economy Germany once again put in the best performance, with its public finances in balance last year.

In marked contrast, France, struggling for growth and under pressure from Brussels to meet the 3 per cent target, stood out with a deficit of 4.3 per cent. 

France was supposed to have kept the 2013 deficit to 4.1 per cent but with the economy in difficulty, the EU in June agreed to give Paris two extra years, until 2015, to bring it back down to the EU ceiling. 

In Paris, the government announced Wednesday a new programme to get the deficit down to 3.8 per cent this year and 3 per cent in 2015 by cutting spending and boosting the economy.

French public spending, equal to 56.7 per cent of economic output this year, will fall to 53.5 per cent in 2017. 

Other EU countries coming in above the 3 per cent limit were led by Slovenia on 14.7 per cent. 

Twice-bailed out Greece had a deficit of 12.7 per cent, Ireland 7.2 per cent, Spain 7.1 per cent, non-euro Britain 5.8 per cent, Cyprus 5.4 per cent, with Croatia and Portugal on 4.9 per cent and Poland on 4.3 per cent.

The European Commission said separately that Athens had achieved a 2013 primary budget surplus — the balance before interest and stripping out bank support and other payments — equal to 0.8 per cent of the GDP.

This was a significant achievement, meeting a key target for its international creditors to  consider additional help.

The EU’s 3 and 60 per cent deficit and debt limits are regarded as prudent targets, the levels states should maintain so they are not overly vulnerable to crises and can manage the public finances in a sustainable fashion.

However, the majority of the 28 member states have breached those limits repeatedly, and for many years in some cases, and were forced to pay a heavy price by the debt crisis.

Wednesday’s figures showed Ireland with total debt of nearly 124 per cent of the GDP while Portugal, also bailed out with Dublin, was on 129 per cent.

Greece, only now returning to growth after six years in a recession which has shrank the economy by a quarter, is saddled with a staggering debt mountain equal to 175 per cent of GDP, Eurostat said.

Even Germany, held up as the model for all others, has total debt at 78.4 per cent, falling, while France is on 93.5 per cent and rising.

Britain, one of the fastest growing major economies, came in at 90.6 per cent for 2013.

AMMAN — Jordan Telecom Group’s (JTG) general assembly on Wednesday approved the recommendation of the board of directors to distribute JD52.5 million dividends to shareholders at a rate of  JD0.21 per share. JTG’s financial statements showed a drop in assets to JD618.2 million in 2013 compared to JD642.2 million in 2012. After-tax profit declined to JD51.7 million last year compared to JD83.2 million in 2012. 

PARIS — Visitors to France should be allowed to shop till they drop seven days a week, the country's foreign minister said Tuesday, weighing into a fierce debate over restrictions on Sunday trading.

"Tourism is an absolutely key sector in France: seven per cent of jobs, with considerable room for growth," Laurent Fabius told RTL radio.

Fabius, who now also handles the trade and tourism portfolios following a government reshuffle, said: "The tourist who comes on a Sunday and goes to a store that is shut is not going to come back on Thursday.”

"For tourists, shops must be open (on Sundays)," he added, saying workers would be duly compensated.

Retailers in France can only open on a Sunday under very specific conditions and recent court rulings have forced some flagship stores on the Champs-Elysees in Paris to end late-night shopping that was hugely popular with tourists.

The rulings were the result of legal action taken by trade unions in defence of the principle that late-night and Sunday working should be exceptional rather than the rule.

But they infuriated those employees who want the extra hours and higher pay that come with such shifts.

The issue of trading hours is part of a broader debate about France's competitiveness and a perceived lack of flexibility in its labour market which some say hinders job creation.

A parallel legal battle over the right of DIY stores to open on Sunday was resolved by the Socialist government deciding to allow them to keep doing so until mid-2015, to allow time for a revamp of the law.

Union representatives were critical of Fabius' wading into the debate, but the French Trade Council, which represents retailers employing 3.5 million people, welcomed the minister's comments.

"It is distressing to see tour operators organising departures from Paris on a Saturday evening to go to neighbouring, more open countries, thereby depriving France of significant sales and the associated jobs," said the council's president, Gerard Atlan.

AMMAN — Jordan Customs announced this week in a press statement the  release of an improved version of the “Golden List Programme” aimed at further facilitating the trade of goods with other countries. 

“This revised form will enable Jordanian trading companies to strengthen their competitive edge in both domestic and international markets,” the statement said. 

The Golden List Programme, launched in August 2005 and now revised with the support of USAID’s Fiscal Reform II Project (FRPII), is a Jordan Customs programme that gives preferred operator status to companies that demonstrate low risk as well as a strong compliance history with certain customs requirements. 

“By facilitating trade transactions for these companies, Jordan Customs not only encourages good corporate citizenship amongst trading companies, but also promotes international best practice in trade across borders,” the statement added. 

According to Jordan Customs, 45 Jordanian companies are presently enrolled in the Golden List Programme, benefiting from reduced cargo processing times, enhanced security of their goods and better risk management.

In order to incentivise more Jordanian companies to join the programme, Jordan Customs is introducing new mechanisms that include revised and less stringent requirements and more benefits. 

“The Golden List Programme is one of our signature initiatives that seek to facilitate trade and increase competitiveness of Jordan’s economy,” Jordan Customs Director General Munther Abdel Qader Al Assaf said in the press statement. 

“The revised programme we are launching today is crucial for expanding the membership base of Jordanian compliant companies,” he added. “By joining this preferred list, Jordanian companies can also enjoy other perks provided by foreign countries linked up with the programme by virtue of bilateral and multilateral agreements.” 

The revaluation of the Golden List Programme was realised with technical support from USAID’s FRPII, particularly in the marketing and outreach campaign as well as the revision of the membership criteria and implementing the consultation channels with Golden List companies and other members of Jordan’s private sector. 

“Our partnership with Jordan Customs in implementing trade facilitating programmes such the Golden List amongst others is a success story untold. Jordan has significantly improved its trade across borders. According to the World Bank Doing Business report, Jordan’s ranking in trading across borders has improved from 77 in the 2011 report to 57 in the 2014 report, essentially jumping 21 positions,” FRPII’s Chief of Party Roberto Toso commented. 

A number of Golden List companies have also been recognised for their exceptional compliance and cooperation at the Jordan Customs launch. 

The companies include Petra Engineering Industries, Haider Murad & Sons Investment Group, Amman Drugs & Trading Co. Ltd. Adatco, Arab Potash Company, EAM Maliban Textiles (Jordan) Private Limited, Munir Sukhtian Group and Manaseer Group Oil and Gas.

KUWAIT CITY — Kuwaiti telecom giant Zain said Monday its net profit rose 7.5 per cent on year in the first quarter of 2014, mainly on the back of returns from new technology investments. Zain announced a net profit of 55.9 million dinars ($198.9 million) in the first three months of the year compared with 52 million dinars in the same period of 2013. Revenues increased 4.7 per cent to $1.1 billion at March 31, from $1.05 billion a year ago, it indicated in a statement. Income from data services recorded a healthy 27 per cent growth during the past 12 months as a result of huge investments in new technology, the company said. In the past 12 months, the company added 2.6 million new clients, and its total subscribers rose to 46.2 million across eight countries. Zain said it secured two major loans of $800 million and $250 million in the past two months, with the latter borrowed on the basis of Islamic Murabaha. Both deals were arranged by international and regional banks. Besides Kuwait, Zain has operations in Bahrain, Iraq, Jordan, Lebanon, Saudi Arabia and Sudan. It also manages a unit in Morocco.