Arab Bank Group Records 40% Growth in 2004 Profits
Jordan-based Arab Bank Group, one of the Middle East’s leading financial institutions, reported record profits in 2004 amid better yields in capital markets and healthy growth in core deposits and loans at the bank. Its net profits rose by 40% to $319.4 million in 2004, compared to $227.7 million in 2003. Arab Bank’s assets improved by 11.4% year-on-year to $27.3 billion. The bank’s mainly Arab customer base helped push deposits up by 10.5% to $22.9 billion in 2004. It is to note that Arab Bank Group is one of the world’s largest privately owned banks, with nearly 15% owned by late Lebanese former PM Rafik Hariri.
GIC Posts 2004 Profit Growth
Kuwait-based Gulf Investment Corp. (GIC), owned by GCC countries, Saudi Arabia, Kuwait, Qatar, Oman, Bahrain and UAE, registered an 8% growth in net profits to $135.4 million in 2004, compared to $125 million in 2003. Shareholders’ equity improved to reach $1.3 billion, whereas assets increased from $6.8 billion in 2003 to $7.3 billion in 2004. GIC is benefiting from its long-term strategy, approved in 2001, focusing on business diversification, managing risks and optimizing resource allocation. Investments by GIC in the Gulf region, exceeding $2 billion in 40 projects and portfolio investments in 2004, increased in sectors such as petro-chemicals, power and telecommunications.
Country Profile: Algeria
In a recent working paper published by the IMF assessing Algeria’s macroeconomic performance in recent years, the Algerian economy seems to witness higher growth rates, lower inflation, increasing international reserves and a progressive decrease in unemployment. The primary reasons behind this economic growth are on one hand, favourable world energy prices, and on the other, fiscal stimulus. However, the main challenge the Algerian authorities will have to raise is the transition into a market economy as well as the launching of an up-to-date management program for the country’s hydrocarbon resources. The IMF directors also encouraged the low-inflation objectives of the monetary policy undertaken in Algeria while expressing their concern over the excess of liquidity, thus encouraging transaction inflows from hydrocarbon companies to be undertaken outside the money market. As a result of this favourable economic outlook towards Algeria, the directors supported the authorities’ request for IMF assistance to improve the exchange system and develop the foreign exchange market giving priority to the development of sound banking systems.
